Membrane Finance, a Finnish firm, announced the launch of a euro-backed stablecoin on February 2nd. The firm says that its new “EUROe” currency is the first and only EU-regulated crypto stablecoin, and it has been granted a licence by the Finnish Financial Supervisory Authority (Fin-FSA).
In June, Circle Inc. of the United States launched its euro-backed stablecoin, called Euro Coin (EUROC), with Silvergate Bank of the United States serving as the inaugural custodian.
Membrane Finance is excited to announce the launch of EUROe on Ethereum!
— EUROe (@EUROemoney) February 2, 2023
According to the company’s website, at least one fiat euro backs each EUROe token at a European financial institution or bank, ring-fenced from Membrane Finance. In contrast to the high costs and poor speeds of traditional financing, the business will allow for near-instant payments at close to zero cost.
As the CEO of Membrane Finance, Juha Viitala, hoped, the regulated EUROe currency will inspire more Europeans to embrace decentralised finance (DeFi) apps to increase their wealth:
“Stablecoins are an essential part of the transition towards blockchain-based money infrastructure, and Europeans deserve to have a full-reserve euro stablecoin from the EU and regulated by an EU-based financial authority. EUROe hopefully brings more regular people to DeFi, who were previously unable to or worried about the volatility of cryptocurrencies.”
The EUROe token will launch on the Ethereum blockchain. Future expansion to other blockchains is envisaged.
Fiat-backed digital currencies, or “stablecoins,” have a storied past in the cryptocurrency market. Tether, the first dollar-pegged stablecoin, debuted on the Bitcoin Omni Layer before launching on Ethereum in 2018. According to CoinMarketCap, it has risen to third place among all cryptocurrencies in market capitalisation.
On January 19th, a study was published by Circle and the developers of the Uniswap decentralised exchange, stating that using a blockchain-based foreign exchange might lessen remittance expenses by as much as 80%.