sunny.png
Wednesday September 28th, 2022 12:11PM

Firm behind popular US dollar stablecoin to launch Euro Coin

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — Cryptocurrency company Circle said Thursday that it will start issuing its first euro-denominated cryptocurrency, a stablecoin known as Euro Coin, later this month.

It would be the first stablecoin in euros — the world's second-most-important reserve currency after the U.S. dollar — backed by a large player in the industry and could potentially become a major conduit for moving cryptocurrencies throughout Europe.

The stablecoin, meaning it's backed by hard assets, is launching at a time of major declines in the value of cryptocurrencies like bitcoin, which has led crypto firms to fail and erase billions of dollars of digital wealth. That has led to calls for government regulation, which the European Union is getting close to approving.

Circle owns and operates USD Coin, the second-most-popular stablecoin in the industry, with more than $54 billion sitting in that coin. The most popular is Tether, which has a market capitalization over $70 billion.

Stablecoins have become an increasingly important part of the cryptocurrency market, acting as a bridge between traditional financial services like banks and those who want to invest or lend in bitcoin or ethereum. They are typically backed by hard assets, like cash, gold or safe government bonds and are typically priced as one coin for one unit of a particular type of currency.

USDC is backed 1-for-1 by cash and short-term Treasurys. The new Euro Coin will be backed entirely by euros held in euro-denominated bank accounts, Circle said.

The company is launching Euro Coin amid turmoil for cryptocurrencies. The third-largest stablecoin, Terra, collapsed in May in a matter of days. Terra was not backed by hard assets, like Tether or USDC are, and instead relied on an algorithm to keep its $1 value in check.

The firm Celsius, with more than $10 billion in deposits, effectively failed this week, and customer deposits have been locked up in the company's accounts with no timetable on when, or if, customers will get their funds back.

Circle's USDC has been a popular place for cryptocurrency investors to move their investments during the turmoil. The total number of USDC in circulation has increased from $49 billion at the beginning of May to more than $54 billion as of this week, according to Coinmarketcap.com. In the same time, Tether's circulation has declined from $83 billion to roughly $71.5 billion.

“This is actually, in some ways, it’s a great time to be launching products," Jeremy Allaire, the CEO and co-founder of Circle, said in an interview. “The market turmoil has been a really positive catalyst for USDC. It has been the flight to safety for crypto.”

Circle’s Euro Coin will be tradeable on some of major crypto exchanges, including Binance, starting on June 30.

The European Union has been working on regulations for cryptocurrencies and other crypto assets like stablecoins.

The bloc's commissioner for financial services and stability, Mairead McGuinness, said Wednesday that the Terra crash and Celsius' problems highlighted the need for crypto rules.

They're also necessary to help enforce Western sanctions on Russia amid worries that cryptocurrencies could be used to evade them, she said.

The EU rules “will be the right tool to address the concerns on consumer protection, market integrity and financial stability,” she said.

The regulations include measures to tackle market manipulation and prevent money laundering, terrorist financing and other criminal activities. They also contain requirements to clearly spell out the risks and costs for consumers.

EU lawmakers have drafted proposed legislation that needs agreement from the bloc’s Parliament and 27 member countries, which is expected soon.

___

AP Business Writer Kelvin Chan in London contributed to this report.

  • Associated Categories: Associated Press (AP), AP World News, AP Business, AP Business - Corporate News, AP Business - Financial Markets, AP Technology News
© Copyright 2022 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Police: Amazon fisherman confesses to killing missing men
Brazilian authorities say a fisherman confessed to killing a British journalist and an Indigenous expert in Brazil’s remote Amazon region and took police to a site where human remains were recovered
9:28AM ( 8 minutes ago )
EXPLAINER: The last-ditch plan to have Pence stop Biden win
The House committee investigating the Capitol riot plans to focus its hearing Thursday on the pressure that Donald Trump put on Vice President Mike Pence in a last-ditch and potentially illegal plan to stop Joe Biden’s election victory
8:51AM ( 45 minutes ago )
UK sanctions Russian Orthodox head; decries forced adoption
Britain has announced a new round of sanctions against Russia
8:49AM ( 47 minutes ago )
Associated Press (AP)
EU leaders decry Russian brutality in visit to Ukraine
Four European leaders made a high-profile visit to show their support for Ukraine, denouncing the brutality of the Russian invasion as they surveyed the ruins of a Kyiv suburb
8:21AM ( 1 hour ago )
EU beefs up disinformation code amid Russia fake news fears
The European Union is beefing up its code of practice on disinformation by enlisting more tech companies and adding measures to prevent online purveyors of fake news from profiting
8:05AM ( 1 hour ago )
Kyiv Diary: European leaders bear witness to war's horror
Before meeting Ukraine's president, a group of European leaders took a tour of the devastation wrought by Russia
7:43AM ( 1 hour ago )
AP World News
Markets dip as monetary policy tightens in US, Europe, Asia
U.S. markets are heading for a sharply lower open on Thursday, one day after the Federal Reserve raised its key interest rate by three-quarters of a point and signaled more rate hikes were coming to fight inflation
8:23AM ( 1 hour ago )
Euro rescue fund to get new chief as its old glory fades
Finance ministers from the 19 countries that share the euro currency could decide Thursday on a successor to lead Europe’s financial rescue fund
6:20AM ( 3 hours ago )
Residents improvise as Texas city rushes to turn water on
Residents of the West Texas city of Odessa have been improvising emergency water supplies after a water system outage left them high and dry for days amid scorching heat, even as utility crews scrambled to restore normal service
6:06AM ( 3 hours ago )
AP Business
Yellowstone floodwaters threaten water supplies in Montana
Damaging floodwaters that tore through Yellowstone National Park menaced communities downstream where residents cleaned up from the mess and kept an eye on rising river levels
12:30AM ( 9 hours ago )
After Yellowstone, floodwaters menace Montana's largest city
Floodwaters that rushed through Yellowstone National Park and surrounding communities earlier this week are moving through Montana’s largest city, flooding farms and ranches and forcing the shutdown of its water treatment plant
8:01PM ( 13 hours ago )
After Yellowstone, floodwaters near Montana's largest city
Floodwaters that rushed through Yellowstone National Park and surrounding communities earlier this week are moving through Montana’s largest city, flooding farms and ranches and forcing the shutdown of its water treatment plant
3:31PM ( 18 hours ago )
AP Business - Corporate News
Pakistani govt chided for 'Drink less tea, save money' plea
A minister in Pakistan’s newly elected government is facing criticism following his plea to the nation to drink less tea to help save on imports amid a deepening economic crisis
12:16AM ( 9 hours ago )
Asian shares gain after Fed assurance on rates lifts Wall St
Asian shares have advanced after the Federal Reserve raised its key interest rate by three-quarters of a point and signaled more rate hikes were coming to fight inflation
11:57PM ( 9 hours ago )
Fed attacks inflation with its largest rate hike since 1994
The Federal Reserve intensified its drive to tame high inflation by raising its key interest rate by three-quarters of a point — its largest hike in nearly three decades — and signaling more large rate increases to come that would raise the risk of another recession
6:18PM ( 15 hours ago )
AP Business - Financial Markets
Police: Amazon fisherman confesses to killing missing men
Brazilian authorities say a fisherman confessed to killing a British journalist and an Indigenous expert in Brazil’s remote Amazon region and took police to a site where human remains were recovered
9:28AM ( 8 minutes ago )
EXPLAINER: The last-ditch plan to have Pence stop Biden win
The House committee investigating the Capitol riot plans to focus its hearing Thursday on the pressure that Donald Trump put on Vice President Mike Pence in a last-ditch and potentially illegal plan to stop Joe Biden’s election victory
8:51AM ( 45 minutes ago )
UK sanctions Russian Orthodox head; decries forced adoption
Britain has announced a new round of sanctions against Russia
8:49AM ( 48 minutes ago )
Production at bedeviled baby formula factory halted by storm
Severe weather has forced Abbott Nutrition to pause production at a Michigan baby formula factory that had just restarted
8:43AM ( 54 minutes ago )
Fed's aggressive rate hikes raise likelihood of a recession
Federal Reserve Chair Jerome Powell has pledged to do whatever it takes to curb inflation, now raging at a four-decade high and defying the Fed’s efforts so far to tame it
8:36AM ( 1 hour ago )