Analyzing euro stablecoins: why Cryptoprocessing.com integrated Stasis EURS
A few weeks ago, Cryptoprocessing.com integrated a new digital asset — the euro stablecoin EURS, issued by Stasis. It joins more than 30 cryptocurrencies we already support. Why did we choose EURS — and what’s the current situation with euro-pegged stablecoins in general?
Why launch euro-pegged stablecoins?
Think of the top stablecoins you know. Which fiat currency are they pegged to?
Tether (USDT), True USD (TUSD), USD Coin (USDC), Gemini (GUSD) — all the currencies on this list of stablecoins are pegged to (and supposedly backed by) the US dollar. The reason is mostly inertia: the first stablecoin issuers did it this way, and the others followed suit.
And yet, there is no real reason why all stablecoins should be based on the USD. Quite the contrary — there are several good reasons to have euro stablecoins:
1) There are more crypto holders in Europe than in the US: roughly 67 million vs 26 million. Right now all these users have to pass through USD to cash out their crypto, and that means extra conversion costs, sometimes 2–3% of the amount.
2) There’s a global trend to move away from the dollar as the main reserve and trade currency. In the next few months, this trend can become even stronger due to the coronavirus pandemic. The EU countries are far ahead of the US in terms of COVID-19 response, so their economies will likely recover faster. In this context, the US dollar can weaken against the euro;
3) European users have additional motivation to hold crypto because of the current negative interest rates in the EU.
4) The debt level in the US has been much higher than in Europe for years; before the pandemic, it stood at $21.6 trillion. Plus, the EU has a positive trade balance.
Considering these factors, it’s surprising that the first euro stablecoins have only appeared in the past few months. There are two prominent projects for now; let’s look at them in detail.
EURS: a more secure way to pay on the blockchain
The EURS coin was created by a company called Stasis. The new stablecoin is 100% backed by physical euros held in reserve in secure bank accounts. It can already be purchased on HitBTC, Changelly, and Globitex.
Payments in EURS are near-instant and almost free. It’s a great way to to send money overseas or pay for purchases online. One can also use EURS as a hedging instrument against portfolio volatility. It can also provide a reasonable rate of return, considering that euro is likely to appreciate against the dollar by up to 4% this year.
The EURS stablecoin is an EIP20 token, meaning that it’s based on the Ethereum blockchain. However, it’s not an Ethereum stablecoin, since it’s pegged to the euro, not to ETH. thanks to the delegated payments technology, users don’t need to pay GAS fees when transferring EURS. Any incurred fees can be paid in EURS — or in any other asset supported by the STASIS wallet.
UPEUR: the ‘universal euro’ for crypto lending services
This stablecoin was developed by the Universal Protocol Alliance. It’s a blockchain coalition that includes the exchange Bittrex, Blockchain at Berkeley, Uphold, and Cred. Apart from the euro coin, the Alliance has also launched an asset pegged to the dollar.
Since Bittrex is involved, it’s not surprising that the new stablecoin was first listed there (on March 20, 2020).
Why did Cryptoprocessing.com integrate EURS and not UPEUR?
The main purpose of UPEUR is to be used on crypto lending platforms. Crypto loans are a fast-growing market and the most popular niche in the DeFi (decentralized finance) industry. Borrowers are normally required to stake stablecoins as collateral before getting a loan, and UPEUR may turn out to be the best stablecoin for this — as well as an on-off fiat ramp for cashing out the loans.
However, here at Cryptoprocessing.com we are mostly concerned with promoting crypto payments. Lending is a very interesting business, but we believe that the way to mass adoption lies through real-world use. We’re working towards the day when people will find it as normal to pay for goods and services in crypto as with a card.
EURS is a payments-oriented coin; that’s why we chose to add EURS to our crypto payment gateway first. Many of our clients operate from the EU — especially those in the iGaming industry. Their customers will certainly appreciate the opportunity to pay in a stable euro-pegged coins. On the other hand, our merchants will feel safe accepting payments in such a stable currency.
Of course, this doesn’t mean that we won’t integrate UPEUR in the future. We’re constantly researching new assets, choosing those that would fit well in the range of the 30+ coins we already support.
If you add crypto payments to your site with Cryptoprocessing.com, you’ll be able to accept EURS, too! Get in touch with us on Facebook or send us an email at firstname.lastname@example.org — we’ll be happy to tell you all the details!