Firm behind popular US dollar stablecoin to launch Euro Coin

moneycontrol.com:

Cryptocurrency company Circle said Thursday that it will start issuing its first euro-denominated cryptocurrency, a stablecoin known as Euro Coin, later this month.

It would be the first stablecoin in euros the world's second-most-important reserve currency after the U.S. dollar backed by a large player in the industry and could potentially become a major conduit for moving cryptocurrencies throughout Europe.

The stablecoin, meaning it's backed by hard assets, is launching at a time of major declines in the value of cryptocurrencies like bitcoin, which has led crypto firms to fail and erase billions of dollars of digital wealth.

Circle owns and operates USD Coin, the second-most-popular stablecoin in the industry, with more than $54 billion sitting in that coin. The most popular is Tether, which has a market capitalization over $70 billion.

Stablecoins have become an increasingly important part of the cryptocurrency market, acting as a bridge between traditional financial services like banks and those who want to invest or lend in bitcoin or ethereum. They are typically backed by hard assets, like cash, gold or safe government bonds and are typically priced as one coin for one unit of a particular type of currency.

USDC is backed 1-for-1 by cash and short-term Treasurys. The new Euro Coin will be backed entirely by euros held in euro-denominated bank accounts, Circle said.

The company is launching Euro Coin amid turmoil for cryptocurrencies. The third-largest stablecoin, Terra, collapsed in May in a matter of days. Terra was not backed by hard assets, like Tether or USDC are, and instead relied on an algorithm to keep its $1 value in check.

The firm Celsius, with more than $10 billion in deposits, effectively failed this week,