As the dollar continues to sink, euro-backed stablecoins are gaining an increasingly important place in the cryptocurrency and decentralized finance (DeFi) ecosystem. Overview of the cousins of Tether (USDT), with the example of EURES, the Statis stablecoin.
A still small role in the ecosystem
Stablecoins are well known in the cryptocurrency world. These stable tokens, which for the vast majority of them follow the price of the dollar , provide protection against market volatility.
The three largest in the industry alone (USDT, USDC and DAI) represent a capitalization of $ 45 billion . An impressive figure that has been steadily increasing in recent months. But these dollar stablecoins are not the only ones on the market .
For several months, stablecoins backed by the euro have been appearing: the Stasis Euro (EURS) and sEUR together represent 76 million euros in capitalization . A much lower figure compared to their cousins, but which is growing every day. Overview.
Two tokens are grabbing the market
Let’s start with the introductions. The two largest stable euro tokens are the EURS and the sEUR . Their price stabilization system is totally different. The sEUR is the euro stablecoin of the Synthetix platform . Its marketcap displays 35 million euros on the meter . Its operation is similar to all assets on the Synthetix platform; it is a so-called synthetic asset, the price of which is guaranteed by the over-collateralization of the protocol and whose price follows that of the euro thanks to the oracles of Chainlink .
The other token, the EURES, is 41 million euros in capitalization , including 20 million additional since January 1. Its operation is similar to USDT or USDT; each EURs issued on the market is guaranteed by a real euro in the bank. In this case, that of the company Stasis . This therefore offers the possibility for any EURR owner to recover a real euro against a company token. And at any time.
“Each token is backed 1: 1 to euros held in the company’s reserve accounts. Most of STASIS ‚reserves are held with approved brokers, which is safer than using commercial banks since these accounts are separate, ”says CEO Gregory Klumov.
So, what’s the point of holding euro stablecoins? Already and just like dollar stablecoins, switching your trading gains to sEUR or EURS does not generate a tax fact. This therefore allows you to secure your earnings, without adding a line to your balance sheet.
A Euro stablecoin is also an opportunity to diversify. If the monetary policy of the United States seems to have had a heavy impact on their currency since the start of the health crisis, the euro seems to be more resilient .
Many Europeans therefore use these stable tokens so as not to see their gains diminish over the months (the dollar has lost more than 10% of its value since the start of the crisis in March). Assets are also easier to return to the balance sheet of companies and institutions which are increasingly entering the crypto market.
A trend towards diversification confirmed by the CEO of Stasis:
“Most of our clients are in the EU zone and prefer this currency in their balance sheet. However, we have a diverse investor base that includes institutions. Since USD backed stablecoins strongly dominate the market, Europeans / Asians are often forced to make unwanted currency choices with few on-chain hedging options. We seek to challenge the dominance of the US dollar in global financial markets. “
DeFi protocols increasingly accept Euro stablecoins
Faced with the craze for the latter, decentralized finance protocols accepting this new stablecoin are increasing .
DeFi’s flagship exchange platform, Curve , notably added the EURS / sEUR pool to its site at the start of the year, with 40% interest in CRV and SNX for liquidity providers. The pool alone brings together $ 70 million, almost all of the supply in circulation .
The appearance of euro stablecoins is also an opportunity to export forex to DeFi. This is especially what Synthetix offers with its sEUR or Jarvis, with the jEUR.