As businesses seek to increase their operations, the demand for stablecoins is on the rise.
Circle Internet Financial has launched USD Coin ( USDC), a fully-reserved stablecoin that is pegged to euro. This signal to the market that there is still a high demand for crypto foreign currency services, despite recent turmoil.
Circle shared a statement with Cointelegraph Thursday that Euro Coin (or EUROC) will be available for trading from June 30. Euro Coin, like USDC, is a fully-backed stablecoin and is fully backed with reserves — in this instance, the euro. This means that every EUROC token will have a equivalent euro-denominated reserve in custody at financial institutions regulated in the United States.
Silvergate Bank was the first custodian of the euro-pegged stablecoin. It is a crypto-friendly financial institution.
EUROC stablecoin allows businesses to have greater access to euro liquidity. This liquidity can be used for trading, payments, lending, and borrowing. Initial launch of the stablecoin on Ethereum blockchain will be as an ERC-20 standard token.
According to the Bank for International Settlement, the euro is second in foreign exchange turnover. According to the 2019 Triennial Central Bank Survey by BIS, 32% of currency trades were made with the euro.
The euro was launched in 1999 and is the common currency for the 19 members of the Eurozone. The dominance of the euro as a trading pair can be seen in the United States Dollar Index (DXY), where it has a 57.6% weighting.
Initial plans for stablecoins were to allow crypto traders to access liquidity in the face of restrictions by banks on digital assets. Their utility has grown significantly over time. Stablecoins are now available to the underbanked and unbanked as well as those who live in countries with capital controls or sanctions that restrict access to dollars. According to Cointelegraph, Circle has recently launched dedicated business accounts for USDC transactions. This demonstrates the growing demand for stablecoin payment among enterprises.