If you’ve been dipping your toes into cryptocurrency, or just read some of the news in the last years, you’ve probably come across the term “stablecoin”.
With an ever-increasing role in the crypto world, stablecoins are kind of the glue that ties and binds this whole digital finance space, and their story is steadily growing.
What exactly is a stablecoin (or stable coin, or stable-value cryptocurrency)?
In simple terms, stablecoins are just a class of cryptocurrency in which the token’s price is tied to a specific cryptocurrency, ETF, or fiat money. They’re designed to exactly mirror the price of their connected asset, thus rendering them invulnerable to the constant value fluctuations that the other, more traditional, crypto tokens experience.
So what does this mean exactly? Let’s use the example of the highest market cap stablecoin: USDT.
USDT is a stablecoin that mirrors the price of the U.S. dollar, issued by a Hong Kong-based company Tether. Its price follows closely the price of the US dollar and fluctuates only when the dollar does. As with most stablecoins, the USDT (or Tether, how it’s best known) is said to be backed up by underlying assets that the Tether company holds.
These assets behind stablecoins are there to ensure that everyone can switch back and forth between the stablecoin and fiat cash, without the possibility of remaining stuck with the stable coin token and unable to exchange it freely.
While being the biggest stablecoin in the market (with a market cap of around 70 billion USD, at the moment), USDT is also maybe the most controversial one.
“Over the years, there have been several controversies regarding the validity of Tether’s claims about their USD reserves, at times disrupting USDT’s price, which went down as low as $0.88 at one point in its history. Many have raised concerns about the fact that Tether’s reserves have never been fully audited by an independent third party.” - from CoinMarketCap.
Why use a stablecoin?
You can use a stablecoin as a first step into the crypto world, for example. Exchanging some of your fiat currency into stablecoin, using a crypto exchange, exposes your portfolio to this new web3 world of assets. You can then use the stable coin to trade for other crypto tokens.
But perhaps one of the most interesting things is the high interest you can receive when staking (parking) your stablecoins on a crypto lending platform, such as BlockFi, Nexo, or YouHodler.
For example: on YouHodler, exchanging your fiat cash for a stablecoin such as USDT nets you a cool 12.3% APR + compounding interest. How does that compare to the interest your bank pays you on your deposits of cash? Exactly!
Keeping in mind their stability, stablecoins prove to be a rising source of passive income. They are not without risk, like everything else in the financial world: you have to take into account the safety of the company issuing that stablecoin, as well as the reputation of the crypto lending platform.
But all things said, earning interest on your stablecoin is one of the safest ways to put your money to work and be a part of the growing web3 movement.
A few things about the EUR stablecoins
Though there are many USD-backed stablecoins, the EUR stablecoins didn’t take off until now. Part of it is the stricter regulations from the EU, with more expected to come soon. Also, here’s another reason from a Coindesk article:
“Finding a bank partner in Europe that is willing to open accounts for crypto-related transactions poses another hurdle for many crypto companies, including stablecoin issuers, according to market participants.”
However, even if progress on this EUR stablecoin front has been a little slow, it hasn’t been impeded and things seem to be moving rapidly towards more market acceptance.
There are a few Euro-backed stablecoins that stand out, with others in the making, and we’re gonna take a closer look at the present, but also the future, of this growing space.
Top 5 Euro Stablecoins
The EURS is undoubtedly the present king of Euro-backed stablecoins, both by market cap and by availability, liquidity, and safety.
Launched in June 2018, EURS is a digital EURO, or stablecoin, created to mirror the price of the euro. EURS is issued by Stasis and is built on Ethereum’s ERC-20 token standard. The company ensures that EURS is fully backed by Euros on a 1:1 basis.
EURS is available on multiple exchanges, such as HitBTC, Changelly, IDCM, Bitfinex, YouHodler, DDEX, IDEX, SWFT Blockchain, Switch, BEQUANT, Blocktane, Cryptology, Anyswap, Sushiswap, Virgox, Hotbit, NiceHash, Uniswap, 1inch, Paraswap, 0x Protocol and Indodax.
Among the crypto wallets that support EURS, we can find the STASIS Wallet, Metamask, Trust Wallet, and Tixl Wallet.
“STASIS is a crypto-enabler platform that provides an institutional-grade link between the decentralized finance world and the off-chain market.”
“The Malta-based crypto wallet provider also offers smart contract creation, third-party audits, custodial services, and the provision of deep expertise in the current crypto regulatory environment to its partners.”
The EURS stablecoin has been growing steadily in the last few months, and they continue to announce partnerships and integrations with other DeFi players, such as Curve.
They’re also very active in targeting the traditional business market, with things like institutional support being built into their crypto wallet:
“STASIS said its new wallet, fully integrated into the Single Euro Payments Area (SEPA), would offer regulated financial institutions, in both business-to-business and business-to-consumer markets, a new gateway into cryptocurrencies.” - from this article.
How safe are EURS and Stasis
Stasis looks to be one of the safest options in the stablecoin field, providing very transparent reserve access.
You can check out more about the steps they take to ensure everything runs smoothly and safely, right on their website: https://eurs.stasis.net/transparency/
How can you use EURS to make money?
Like we talked about at the beginning of the article, one of the appeals of stablecoins is the ability to get a high interest while staking them on crypto loaning platforms, while at the same time being protected from the usual volatility of crypto assets.
The best way to use this STASIS Euro-backed Stablecoin: you can earn 12% APY on YouHodler, for staking your EURS there.
Launched in December 2018, the sEUR stablecoin, by Synthetix, tracks the price of EUR through price feeds supplied by an oracle, and is backed by a synthetic asset platform.
“On the popular DeFi protocol Synthetix, which creates on-chain synthetic assets that track the value of real-world assets, synth sEUR (SEUR) is the No. 4 synthetic asset by market capitalization, just behind Synthetix’s own token Synthetix (SNX), synth sETH (SETH) and Synth sUSD (SUSD), according to data from DeFi Market Cap. Synth sEUR also contributes to 20% of Synthetix’s total debt pool for synthetic assets, behind only sUSD’s 34% and sETH’s 30%.”
Synthetix is a DeFi player, providing synths, which are basically “derivative tokens providing exposure to a range of assets. They can be traded with infinite liquidity and zero slippage by leveraging the Synthetix protocol’s unique pooled collateral model. Trades between Synths generate a small fee that is distributed to SNX collateral providers.”
Here’s another good explanation of what Synthetix does:
“Synthetix (SNX) is built on the Ethereum network, and the project enables users to issue as well as trade synthetic decentralized assets. Formerly known as Havven (before rebranding to Synthetix), SNX enables the creation of on-chain synthetic assets (known as “Synths”) that track the value of assets in the real world.” - from a very good Kriptomat article.
Also, DeFi’s flagship exchange platform, Curve, has 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.
Exchanges, where you can trade sEUR, include Synthetix Exchange and Hotbit.
Who should use sEUR
If you’re already in the Synthetix ecosystem, you could use the sEUR / EURS liquidity pool (https://curve.fi/eurs/) to earn some passive income, paid in CRV and SNX tokens.
Launched in 2016, EURt is similar to Tether’s other (more known) stablecoin, the USDT. It’s pegged 1:1 to the EUR, and “EURT is fully backed by a banking trust in Taiwan” (at least, that’s what they announced at launch).
If you’ve been for some time in the crypto space, you know that the USDT (Tether’s US dollar-pegged token) is by far the largest of the stablecoins. Their Euro token aims to follow in the footsteps of its bigger brother and is already used on multiple platforms for trading and staking.
Currently, there are four Tether stablecoin currencies: USDT (tied to the U.S. dollar), EURT (tied to the Euro), CNHT (tied to the Chinese yuan), and XAUT (tied to one ounce of gold per token).
Here are the exchanges where you can trade EURt: Bitfinex, Uniswap, Bitstamp, 1inch Exchange, 0x Protocol, Paraswap, Curve Finance, and CREAM Finance.
Who should consider using EURt
If you’re already using DeFi exchanges, such as Curve or CREAM, for yield earning services, and you have your fiat cash in EUR, you should consider swapping into EURt and utilizing it to trade or make some passive income through interest paid on these platforms.
“Celo is a mobile-first blockchain ecosystem that focuses on increasing cryptocurrency adoption among smartphone users. Celo has built a global infrastructure that seeks to introduce billions of smartphone owners to transact in online currencies to make financial activities easier to access.” - from a recent DailyCoin article.
cEUR (Celo Euro) is a stable digital asset that tracks the Euro. With cEUR, users can transfer value faster, cheaper, and more easily on their smartphones. As with the Celo Dollar (cUSD), the Celo Euro is supported by multiple crypto assets in the Celo Reserve, including BTC and ETH.
Launched in April 2021, cEUR represents another step forward for the CELO platform.
Things have been on a roll for this young stablecoin, with CELO seemingly securing new partnerships on a monthly and even weekly basis. Here are some of these partnerships:
- in June 2021, they partnered with the browser Opera, bringing cUSD/cEUR as the first stablecoins to be added to Opera browser's built-in crypto wallet, to mitigate cryptocurrency volatility
- also in June 2021, Crypto bank Anchorage Digital said it is adding custody for the Celo Euro (cEUR) stablecoin
- other partnerships included support for their stablecoins (cUSD & cEUR), as well as for their native crypto token, CELO, helping bridge the traditional financial world with the crypto web3 space.
Just to name a few of these partnerships: PayU, one of the largest payment providers for emerging markets, made a significant purchase of CELO native digital assets; Deutsche Telekom is also investing in the future of the decentralized financial economy – with a significant purchase of Celo’s native asset (CELO); and to top it all, Celo has raised more than $65 million to date from investors including Andreessen Horowitz, Coinbase and Jack Dorsey.
Here are a couple of exchanges where you can find and trade cEUR: KuCoin and Ubeswap.
Who is cEUR for?
If you are eyeing CELO as an investment opportunity (considering their mobile users' aim and also their relative stability when faced with crypto market volatility), cEUR would make for a valuable asset in which to park your EUR fiat.
With growing interest and support from traditional finance institutions, CELO seems poised to be a significant part of the future of web3 and DeFi.
Launched in May 2021, PAR is a stable token algorithmically pegged to the Euro.
It’s exclusively minted in relation to loans on Mimo DeFi, their lending platform, and PAR tokens are collateralized by assets accepted on Mimo DeFi.
The Mimo team is mostly based in Singapore and Dubai.
Parallel (PAR) has been billed as the first decentralized stablecoin that is algorithmically pegged to the Euro. Stability is achieved by keeping collateral locked in a smart contract vault.
“Mimo DeFi is a decentralized lending platform that allows users to mint the native stable token PAR (Parallel), algorithmically pegged to the Euro. Users lock BTC, ETH, and USDC (with more crypto options to be added) as collateral in a virtual vault while minting PAR which can be staked in the liquidity pools to earn high-yield returns.”
Also in June, the PAR stablecoin has been added to trading on the Bittrex exchange.
PAR is one of the latest additions to the Euro stablecoins field, but its market cap is growing and its future looks promising.
Exchanges where you can find PAR include the likes of Bittrex, Balancer, and 1inch Exchange.
Who is PAR stablecoin for?
I’d say if you are already a full customer of Bittrex, or maybe the 1inch DeFi exchange, and you have your fiat funds in EUR, it’s easy to swap your fiat into PAR there and use it for your crypto endeavors.
Other notable Euro stablecoins
As we’ve seen with the top 5 EUR stablecoins above, their market cap is on the rise. I haven’t included in this top some of the other players in the field, usually because they’re still relatively small or information on them is scarce.
But if you’re studying this field, you might also look into these EUR stablecoins:
- Jarvis Synthetic Euro (JEUR) https://jarvis.network
JEUR is a multi-collateralized synthetic token tracking the price of Euro, built on the top of UMA and Chainlink.
- eToro Euro (EURx) https://etorox.com/exchange/euro/
EURX is a tokenized stablecoin that is listed for trading on the eToroX Exchange. EURX is tied to the value of the Euro on a 1:1 valuation basis, making trading in EURX on eToroX the same as exchanging or trading fiat Euro. You can also use EURx on the Nexo.io exchange, and earn some interest when staking it there.
- EURB (https://cointelegraph.com/news/euro-stablecoin-launched-on-stellar-by-one-of-europe-s-oldest-banks)
- EUR-L (https://www.coinhouse.com/eur-l/)
- EURL (https://www.lugh.io)
- UPEUR (https://www.universalprotocol.io)
Some of these projects still have to withstand the test of time, and we’ll see which one of them can capture some market cap from the more established stablecoins in our top.
So which stablecoin would I recommend? The answer, for now, is obvious: if you want to exchange some of your EUR fiat currency into crypto tokens, just go for EURS, the Stasis-issued token.
Its best use case is the high interest you can get from staking it on platforms such as YouHodler: 12% APY interest is way above what your bank might pay you for keeping your Euro fiat in their accounts, and is a simple, relatively safe way to create some passive income.
As for the rest of the stablecoins in the top, they usually make sense if you are already doing business on the exchanges where they are being traded.
As I mentioned above, each exchange has its preference of integrated EUR stable coin, so it’s easier just to go with their option if you are already trusting them with your trades.