A blog post from Membrane Finance on Feb. 2 says that the company has released a stablecoin backed by the euro that is fully reserved.
Each EUROe token is reportedly backed by "at least one fiat euro [...] in a European financial institution or bank, ring-fenced from Membrane Finance."
The company has a license from the Finnish Financial Supervisory Authority (Fin-FSA), and they say that the new "EUROe" coin is "the first and only EU-regulated crypto stablecoin."
The company thinks it will allow "near-instant payments" at almost no cost, unlike the high costs and slow speeds of traditional finance.
Membrane Finance CEO Juha Viitala said he hoped that the regulated EUROe coin would encourage more Europeans to use decentralized finance (DeFi) apps to grow their wealth.
"Stablecoins are an essential part of the transition towards blockchain-based money infrastructure, and Europeans deserve to have a full-reserve euro stablecoin from the EU and regulated by an EU-based financial authority. EUROe hopefully brings more regular people to DeFi, who were previously unable to or worried about the volatility of cryptocurrencies," Viitala said.
The EUROe will first be available on Ethereum, but support for other blockchain networks is planned for the future.
Circle Inc., which is based in the U.S., released its own euro-backed stablecoin in June. However, its Euro Coin (EUROC) was initially held by Silvergate Bank, which is a U.S.-regulated entity.
EUROC stablecoin gives businesses easier access to euro liquidity, which can be used for payments, trading, lending, and borrowing. The stablecoin will start out on the Ethereum blockchain as an ERC-20 standard token.
According to the Bank for International Settlement, the euro is the second largest fiat currency in the world in terms of the amount of foreign exchange it does (BIS). The BIS's 2019 Triennial Central Bank Survey found that the euro was on one side of 32% of all currency trades.
On Jan. 19, Circle and the people behind the Uniswap decentralized exchange put out a report saying that blockchain-based foreign exchange can cut remittance costs by up to 80%.
Stablecoins, or crypto tokens backed by fiat currency, have a long and illustrious history in the crypto world. The first U.S. dollar stablecoin, Tether (USDT), was first released for the Bitcoin Omni Layer. In 2018, an Ethereum version came out. CoinMarketCap says it is now the third-largest cryptocurrency by market capitalization.
Stablecoins now help people who don't have bank accounts or don't have enough bank accounts, as well as people in countries where access to dollars is limited because of capital controls or sanctions.