As central banks explore and contemplate promoting stablecoins, this post reviews two major stablecoins, EURS and USDC, in terms of their key features, benefits, and limitations.
Stablecoins, as has long been known, are gaining popularity in the blockchain industry due to the fact that, unlike regular cryptocurrencies, their value is fixed 1:1 to that of a specific fiat currency. They are stable because to this quality, making them an acceptable replacement for other payment methods. It is no accident that central banks are researching the stablecoin phenomenon and anticipate promoting their use more and more. Today, we will analyze two significant stablecoins, EURS and USDC, in order to better grasp their key traits, key advantages, and potential weaknesses.
Leading Euro-Backed Stablecoin in Europe: EURS
The largest digital asset backed by the euro was introduced by STASIS in 2018. The advantages of the second-most traded currency in the world, the euro, are combined with the efficiency, immutability, and transparency of the blockchain in EURS.
In actuality, a network of exchanges, custodians, liquidity providers, and payment processors supports the stablecoin. In particular, EURS is the first stablecoin to enable delegated payments on the Ethereum network. It is an ERC/EIP20 token.
These improvements significantly enhance the user experience by allowing users to pay transaction fees in EURS or any other digital asset accepted by the STASIS wallet, rather than GAS, which they previously had to do in order to send money.
Furthermore, STASIS has earned the reputation as a reliable stablecoin supplier by creating a tried-and-true method for engaging with conventional financial institutions.
User confidence in EURS, which is active on the five most prominent blockchains and more, with more planned for 2023, has grown over time thanks to its simplicity of use, absence of volatility, multichain support, and full financial transparency.
AML audits by Grant Thornton and financial audits by BDO were just two of the stringent regulatory and AML audits that STASIS has completed.
In particular, STASIS EURS has handled over €5.5 billion in transactions, and no bank has ever turned down business from the company.
STASIS’ EURS token allows professional investors to access the cryptocurrency market similar to traditional financial systems through collaboration with SCB.io and maintains direct business ties with central banks for market stability and security.
EURS combines blockchain technology with the security of the euro to bridge the gap between traditional and digital economies and has potential for innovation.
In contrast to USDC
A stablecoin, USDC is anchored to the US dollar in this instance.
As a result, USDC likewise maintains a stable value when the value of other cryptocurrencies varies by operating on the same principal as EURS.
Additionally, USDC initially only used the Ethereum (ETH) blockchain, but it now uses a variety of other blockchains, such as Solana, Avalanche, Algorand, Cosmos, and others.
USDC enables users to tokenize the dollar, making it useable in transactions on blockchain, cryptocurrency exchanges, and other platforms, much like how EURS works with the euro.
Additionally, Circle and Centre have created USDC coins, which may be quickly converted into fiat money.
Although USDC has always avoided security blunders, it recently encountered a number of issues as a result of Silicon Valley Bank’s shutdown following its bankruptcy.
The creator of the Circle stablecoin acknowledged having $3.3 billion locked up with the commercial bank SVB at that time, or precisely in March.
This meant that more than 7.5% of USDC’s reserves were no longer accessible given that the company’s overall market capitalization was roughly $43.5 billion.
This comment at the time undoubtedly worried a number of knowledgeable investors, who may have abandoned USDC in favor of other stablecoins, even if the matter has since been resolved.
This specific occurrence involving USDC might help explain why STASIS chose to use ERS instead of leveraging commercial banks when creating a stablecoin infrastructure.
In such a technologically advanced world, these can be completely emptied within a day by a “violent” bank run, as we have sadly seen with USDC.