Quick Look:
- EURC Launch on Base Network: Circle launches its euro-backed stablecoin, EURC, on the Base network, marking its first native form on an Ethereum layer-2 network.
- Enhancing Global Trade: EURC on Base aims to streamline e-commerce transactions, reduce costs, and improve efficiency for cross-border trades.
- MiCA Compliance: EURC and USDC on Base are MiCA compliant, setting a regulatory benchmark and enhancing credibility.
On 9th July 2024, Circle made headlines by launching its euro-backed stablecoin, EURC, on the Base network. This event marks a significant milestone in the evolution of digital currencies and their application in global commerce. Before this, EURC was exclusively available on networks like Avalanche, Ethereum, Solana, and Stellar.
This expansion onto the Base network, an Ethereum layer-2 solution, is particularly noteworthy because it represents the first instance of EURC being available in a native form on a layer-2 network. Previously, layer-2 networks could only utilise a derivative form of EURC backed by versions on other networks, making this development a breakthrough in the accessibility and utility of the stablecoin.
Facilitating Global Trade
Circle asserts that introducing EURC on the Base network will significantly enhance global trade, especially for e-commerce applications. Integrating a euro-backed stablecoin into an Ethereum layer-2 network could streamline transactions, reducing costs and improving efficiency. This is particularly relevant in e-commerce, where speed and cost-effectiveness are crucial. Businesses can expect a smoother cross-border trading experience by enabling more straightforward euro transactions. This innovation could open new avenues for global trade, making it easier for merchants and consumers to engage in transactions without the usual financial friction associated with traditional banking systems.
MiCA Compliance: A Benchmark for Stablecoins
One of the standout features of the new EURC on Base is its compliance with the MiCA regulation. The EURC and USDC on Base are among the first stablecoins from a global issuer to meet these stringent regulatory standards. MiCA compliance is a significant achievement, as it ensures that these digital assets adhere to a comprehensive framework designed to protect investors and maintain financial stability. This regulatory approval enhances the credibility of Circle’s stablecoins and sets a new benchmark for other issuers aiming to launch compliant digital currencies.
Bitstamp Delists Tether Euro (EURT)
In a related development, Bitstamp announced the delisting of EURC’s main competitor, Tether Euro (EURT), citing non-compliance with the MiCA framework as the primary reason. This move could have far-reaching implications for the market dynamics of euro-backed stablecoins. With EURT no longer available on one of the significant exchanges, EURC could capture a larger market share. This shift may encourage other exchanges to prioritise regulatory compliance, fostering a more transparent and secure environment for stablecoin transactions.
Benefits for Base Users
For users of the Base network, EURC offers a host of benefits. One of the most compelling advantages is quickly exchanging euros for dollars and vice versa. A study conducted in 2023 highlighted that blockchain-based foreign exchange (forex) trades could reduce costs by up to 80%. This cost efficiency and enhanced speed and security of blockchain transactions make EURC a desirable option for Base users. The potential for reduced transaction fees and faster settlement times could revolutionise the way users interact with digital currencies, promoting broader adoption and integration into everyday financial activities.
Decentralised Exchange Listings
Despite the excitement surrounding EURC’s launch on Base, some hurdles still exist. Several decentralised exchanges, including Aerodrome, Uniswap, and BaseSwap, have not yet listed the new EURC coin. This absence may limit the immediate accessibility of EURC for users who prefer decentralised platforms for their trading activities. However, it is likely only a matter of time before these exchanges include EURC in their listings, given the coin’s regulatory compliance and the growing interest in stablecoins. As more platforms adopt EURC, its liquidity and utility are expected to increase, further solidifying its position in the digital currency market.
Decentralised Exchanges Yet to List New EURC
The launch of Circle’s EURC on the Base network represents a pivotal moment for euro-backed stablecoins. By expanding its availability to an Ethereum layer-2 network, Circle has opened new global trade and e-commerce possibilities. Compliance with MiCA regulation underscores the growing importance of regulatory adherence in the digital currency. As Bitstamp’s delisting of Tether Euro (EURT) demonstrates, regulatory compliance can significantly impact market dynamics. For Base users, the introduction of EURC promises enhanced cost efficiency and ease of transactions. Although yet to be widely listed on decentralised exchanges, the future looks promising for EURC as it continues to make strides in digital finance.
