When you think of stablecoins, what’s the first one that springs to mind? Chances are it is one pegged to the US dollar. After all, USD stablecoins account for over 99% of the total stablecoin market capitalization.
Technically, however, the price of a stablecoin can be fixed to the price of just about any asset. That asset could be a fiat currency, a commodity like oil or gold, or even another cryptocurrency.
Euro-based stablecoins are a relatively new variety of these digital assets. This article reviews the best ones and suggests how and why you should consider including them in your portfolio.
|Name||Ticker||Issuer||Launch Year||Backing||Backing Confirmation||Last Confirmation|
|Stasis Euro||EURS||Stasis||2018||Fiat||Daily Statement and Annual Audit||10/2021 (annual audit)|
|Euro Coin||EUROC||Circle||2022||Fiat||Monthly Attestation||08/2022|
|Euro Tether||EURT||Tether||2021||Fiat||Quarterly Independent Accountant Reports||06/2022|
|Celo Euro||CEUR||Celo||2021||Algorithm / crypto hybrid||Smart Contracts Audit||02/2021|
|e-Money Euro||EEUR||e-Money||2021||Fiat||Quarterly Proof of Funds Audit Report||5/2022|
|agEUR||AGEUR||Angle||2021||Crypto||Protocol Security Audit||5/2022|
|Parallel||PAR||Mimo||2021||Algorithm||Protocol Secuity Assessment Certificate||1/2021|
|sEUR||SEUR||Synthetix||2018||Crypto||Smart Contract System Audits||02/2021|
Top 4 Ranked EUR Stablecoins by Size
Here’s how the top four ranked EUR stablecoins stack up against each other in terms of market capitalization:
Why Do We Need Euro-Backed Stablecoins?
If you want to protect yourself against crypto market volatility without exiting the crypto market, you need stablecoins. They let you move your crypto funds into a digital asset instead of cashing out into fiat.
The question is which stablecoin to choose. The majority of your options are pegged to the USD.
If you want the price stability of a fiat currency but don’t want it from the US dollar, the euro is a great choice.
With euro-backed stablecoins, you can get the price stability of fiat euros with the flexibility of crypto.
The Case for Euro-backed Stablecoins
If you like thinking in terms of euros when you invest or do business, you’re not alone.
For people around the world, the euro is the “second most important currency in the international monetary system“, according to the European Central Bank. As of the end of 2021, 20% of global foreign exchange holdings and just under 40% of global currency transactions were in euros.
The market capitalization of stablecoins pegged to the world’s most important currency — the US dollar — is over $150 billion as of this writing. Therefore, it’s natural to expect proportionate market demand for stablecoins pegged to the world’s second most important currency.
Watch for EUR stablecoins to account for a more significant piece of the stablecoin pie as time goes on.
How Do You Make Money with Euro-based Stablecoins?
With EUR stablecoins, you can earn money in more stable ways than trading or mining unpegged crypto assets. For example:
Staking. This means locking up your euro stablecoins as or with a network validator and earning a cut of the fees charged for network validation. (Click here for our list of top staking yields.)
Lending. You can get some truly great yields from borrowers, many of whom are betting that an unpegged crypto asset like bitcoin will rise in value vs. the euro. (Click here for our list of top crypto lending platforms.)
Yield farming. You can put your EUR stablecoins into liquidity pools for automated market makers on crypto exchanges, in return for high-yield interest rates. (Click here for our list of Best Yield Farming Rates.)
How Price-Stable Are Euro-based Stablecoins?
Euro-based stablecoins are designed to be pegged to the euro and tend to do a good job of it. Even so, their prices can fluctuate a few cents above and below the 1 EUR mark.
These fluctuations occur as the stablecoin issuers manage supply on the market to keep the peg.
It is possible that a EUR stablecoin could lose its peg, as the TerraUSD (UST) notoriously did. To avoid getting burned in such a crash, it’s worth spending a few minutes investigating how a EUR stablecoin is backed.
Euro stablecoins backed 1:1 by fiat euros (“fully backed” or “reserve backed” stablecoins) are generally the safest, as you know there’s “money in the bank” if all stablecoin holders want to redeem their holdings at once.
Euro stablecoins backed by algorithms (“algorithmic stablecoins”) are generally the riskiest, as these rely on complicated math to manage supply and demand, which can fail during periods of strong human emotion.
Euro stablecoins backed by other cryptocurrencies are somewhere in between: better than nothing, but not as good as fiat backed. If the entire crypto market plummets, and everyone wants to withdraw, the stablecoin could go bust.
What is Backing Each Euro Stablecoin on the List?
Taking a closer look at each EUR stablecoin, let’s examine:
- How the euro stablecoin is backed.
- How (and how regularly) the euro stablecoin’s backing is confirmed.
- The euro stablecoin issuer’s perceived reliability. We want to anticipate how willing and able the issuer will be to protect the euro peg in case of problems (for example, a market crash or bank run).
- The euro stablecoin’s adoption, judged by market cap and the number of exchanges that support it.
What is Backing EURS?
|Backing Confirmation||Accountancy BDO Malta confirms the euro reserves backing EURS in daily statements and the issuer’s overall financial condition in a full audit every year.|
|Issuer Reliability||EURS was launched in 2018 by Malta-based Stasis. Stasis’ executive team has been collaborating with the Maltese government on the country’s cryptocurrency legal framework since 2012. Stasis publishes full accounting audits every year. These audits give us a broad overview of Stasis’ overall financial strength.|
|Adoption||EURS has a market cap of €123,091,870 and can be traded on 7 exchanges.|
|BMJ Review||EURS is our top pick for euro stablecoins. Stasis is the only euro stablecoin issuer publishing full audits, and EURS has the highest market cap of any euro stablecoin. EURS is Stasis’ only product; the team appears to be focused on doing one thing and doing it well.|
What is backing EUROC?
|Backing Confirmation||Accountancy Grant Thornton confirms the euro holdings backing EUROC in monthly attestations prepared according to American Institute of Certified Public Accountants (AICPA) standards.|
|Issuer Reliability||EUROC was launched in June 2021 by Circle. Circle is a technology company formed in 2013. It has big-name investors like Goldman Sachs, BlackRock, and Fidelity Investments. The company has been issuing USDC, the second most popular stablecoin pegged to the US dollar, since 2018, and is licensed by financial regulators in the UK, Bahamas, and the US.|
|Adoption||EUROC has a market cap of €76,536,957 and can be traded on 10 exchanges.|
|BMJ Review||EUROC is a solid choice for a euro stablecoin. It has the second largest market cap of all euro stablecoins. It also has a well-financed issuer with plenty of licenses and an excellent reputation. Monthly reserve attestations give us only a snapshot of Circle’s reserve holdings – not overall financial solvency – but the company appears to have the motivation and resources to protect the EUROC peg if it comes under pressure.|
What is Backing EURT?
|Backing Confirmation||The euro holdings backing EURT are confirmed in independent account reports that have been published every quarter since the stablecoin’s launch. The most recent report was prepared by accountancy BDO Italia.|
|Issuer Reliability||In its current form, EURT was launched in June 2021 by Tether Limited, a company owned by Hong Kong-based iFinex Inc. Tether has been issuing fiat-backed stablecoins since 2014. The company has been the subject of some controversy, lawsuits, and regulatory scrutiny as to whether its stablecoins are in fact backed 1:1 by fiat.|
|Adoption||EURT has a market cap of €39,890,909 and can be traded on 9 exchanges.|
|BMJ Review||EURT is a reasonable choice for a euro stablecoin, but there are better alternatives – especially if you plan to hold for the long term. Stablecoin fact-checkers love to hate Tether, but the company has admirable staying power. Tether issues the most popular stablecoin of all, USDT, and has been publishing quarterly independent account reports for EURT since its launch. EURT has the third largest market cap of all euro stablecoins.|
What is Backing CEUR?
|Backing Confirmation||The issuer’s website lists a number of audits and analyses that have been performed on the smart contracts, security, and economics behind CEUR. No supporting information is easily accessible there, however, except for a smart contract audit performed by blockchain security company OpenZeppelin in February 2021.|
|Issuer Reliability||CEUR was launched in 2021 by the Celo Foundation, which was formed in 2017. CEUR is partly backed by CELO, the Celo protocol’s native asset, whose early holders include well-known crypto investors like Andreesen Horowitz and Jack Dorsey.|
|Adoption||CEUR has a market cap of €33,572,100 and can be traded on 6 exchanges.|
|BMJ Review||A long-term crypto investor will probably want to wait for this euro stablecoin to get more traction before buying. CEUR has innovative technology and some well-known names behind it, but any stablecoin not backed 1:1 by fiat should be approached with caution. Also, CELO does not appear to have published supporting information regarding most of the third-party audits and analyses listed on its website.|
What is Backing EEUR?
|Backing||Fiat (currency and government bonds)|
|Backing Confirmation||Ernst and Young Denmark provides an independent auditor’s report of the reserves backing EEUR every quarter.|
|Issuer Reliability||EEUR was launched in 2021 by Danish e-Money A/S, which was started in 2016. The company has a wide range of crypto investors that do not get a lot of press coverage.|
|Adoption||No market cap data is available. EEUR can be traded on two exchanges and bought via the issuer’s trading desk in exchange for BTC, ETH, or ATOM as well as fiat currencies SEK, NOK, CHF, EUR, and DKK.|
|BMJ Review||This euro stablecoin is an interesting option for fans of the Cosmos blockchain app ecosystem, but other investors will be better off with more popular EUR stablecoins with larger market caps and greater availability on multiple exchanges. EEUR is one of the fiat-backed stablecoins supported by e-Money within Cosmos.|
What is Backing AGEUR?
|Backing Confirmation||Security audits appear to be published on an ad hoc basis to cover new protocol developments. The most recent one was published in May 2022 by Chainsecurity, a blockchain-focused IT security company.|
|Issuer Reliability||AGEUR was launched in 2021 as the first stablecoin issued by the Angle Protocol, an organization backed by various venture investors including Andreesen Horowtiz.|
|Adoption||Market cap data is unavailable. AGEUR can be traded on five exchanges.|
|BMJ Review||AGEUR is another euro stablecoin with promising potential and resources from industry heavyweights, but a long-term crypto investor should tread carefully with any crypto-backed stablecoin.|
What is Backing PAR?
|Backing Confirmation||Blockchain security company Quantstamp gave the protocol behind PAR a security assessment certificate in January 2021. There does not appear to be a regular schedule for obtaining protocol security assessment certificates, and none have been published between January 2021 and October 2022.|
|Issuer Reliability||PAR was launched in 2021 by the development team who built the TenX wallet platform in alliance with Visa. This team is now operating as Mimo Defi.|
|Adoption||Market cap data is not available. PAR can be traded on five exchanges.|
|BMJ Review||PAR is an interesting euro stablecoin that you can mint yourself using other crypto as collateral. That’s a DeFi use case worth exploring, but a long-term investor should avoid parking significant capital in any algorithmic stablecoin, especially one that does not publicly confirm its backing mechanism very often.|
What is Backing SEUR?
|Backing Confirmation||According to published information, the protocol behind the SEUR was being technically audited on a regular basis up until February 2021 by cybersecurity services firm iosoro. More recent updates have not been published on the issuer’s web page, which says that the audit history list is not maintained.|
|Issuer Reliability||Launched in 2018, SEUR is one of the synthetic assets that can be issued by the Synthetix protocol. Since 2020, the Synthetix protocol has been run by three decentralized autonomous organizations (DAOs): protocolDAO for protocol upgrades and smart contracts, grantsDAO for community funding proposals, and synthetixDAO for allocating development funds.|
|Adoption||Market cap data is not available. SEUR can be traded on two exchanges.|
|BMJ Review||Most crypto value investors will steer clear of SEUR. The technology behind it is quite innovative, but crypto is riskier than fiat as backing, and the unmaintained audit history raises some tough questions. The most recent published audit was from February 2021. Also, the overall concept of DAOs – three of which govern Synthetix – is relatively new and unproven.|
Having the option to hold your digital capital in euro based stablecoins opens up an additional degree of flexibility for both active traders and long-term investors. In closing, remember that all stablecoins carry some degree of risk, so always do your due diligence and don’t invest more than you’re willing to lose.
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