A New Era for Euro-Denominated Stablecoins

In April 2024, OpenTrade launched our first EURC yield product to provide fintechs and investors in both Europe and around the world an innovative and market leading on-chain euro yield solution.

Let’s dive deeper and learn more about EURC, stablecoin regulation in the EU, and OpenTrade’s newest EURC yield product.

1. What is EURC?

EURC is a Euro-denominated stablecoin issued by Circle. It is fully reserved and always redeemable 1:1 with fiat euros. Similar to USDC, EURC provides a digital alternative to fiat currencies, offering a faster, easier, cheaper, and more programmable way to transfer, store, and manage money across borders.

With EURC, users can seamlessly make transactions, investments, and savings, all while enjoying the stability and familiarity of the Euro. As the adoption of digital currencies continues to grow, EURC represents a critical step towards diversifying the stablecoin ecosystem and broadening the options for European investors and users.

2. MiCA and the Potential Impact on Euro Stablecoins

The European Union’s Markets in Crypto-Assets (MiCA) regulation is a comprehensive regulatory framework for crypto-assets across Europe, including stablecoins like EURC. MiCA aims to establish clear rules for issuers and service providers, enhancing consumer protection and fostering innovation in the digital finance space.

While currently small, the market for euro-denominated stablecoins is poised for significant growth under MiCA’s regulatory clarity. By providing a secure and regulated environment, MiCA is expected to boost investor confidence and drive the adoption of Euro stablecoins, potentially making them a key player in the global digital currency landscape.

In July, Circle secured a licence from France’s banking regulator as an Electronic Money Institution and became the first global stablecoin issuer to comply with MiCA, enabling it to offer both USDC and EURC as E-Money Tokens across the European Union.

3. OpenTrade’s Flexible Term EURC Vault: A market-leading EURC Yield Product designed for Fintechs around the world

In launching the Flexible Term EURC Vault, OpenTrade sought to meet the increasing demand for euro stablecoins and EUR-stablecoin yield.

OpenTrade’s EURC yield product is currently one of the only of its kind on the market and boasts the lowest fees by a wide margin, the highest liquidity, and best returns while being the only solution that can be white-labelled and fully embedded in other fintech applications. Here’s how it works:

Access via Fully Embedded Solution or Intuitive Web App

Fintechs and Investors are able to connect to our platform via API, blockchain protocol, or via our web application. From there, they can make EURC investments and begin earning yield immediately. Our platform enables fintechs to build fully embedded, white-labelled EURC yield products and/or better manage their own treasury cash from a single integrated solution.

Yield

Loans made through the vault earn a variable interest rate, benchmarked to the yield curve spot rate for 3-month European AAA-rated Government bonds, as published by the European Central Bank. Interest compounds daily.

Collateral and Security

All loans made through the EURC vault are fully secured by EUR-denominated cash and cash-equivalent collateral, leveraging the same bankruptcy remote structure and institutional grade legal framework as our USDC yield products. This provides security, safety, liquidity, and competitive yields.

The EURC vault’s collateral consists exclusively of highly liquid, euro-denominated assets, including EUR, EURC, 1-month government bonds issued by Germany, France, and Italy, and a Moody’s Aaa-mf / S&P AAAm rated money market fund. All collateral is held in bankruptcy remote accounts with large, regulated financial institutions.

Withdrawals

Investors can request withdrawals at any time, with most withdrawals processed the same day and a maximum processing time of two business days, providing both flexibility and accessibility. Instant withdrawal facilities are available for clients that meet certain criteria.

Conclusion

As the world of digital finance continues to evolve, the introduction of EURC and OpenTrade’s innovative EURC yield products mark a significant step forward in broadening the stablecoin ecosystem. The seamless integration of EURC into various fintech applications offers unparalleled flexibility and efficiency for users, while its compliance with the MiCA regulation ensures a stable, regulated environment for transactions. OpenTrade’s market-leading yield product not only addresses the growing demand for euro-denominated stablecoins but also provides an attractive, secure, and highly liquid investment option.

Fintechs seeking to enhance their solution or investors looking to optimise their treasury management are invited to learn more or get in touch via the OpenTrade website.