When people talk about stablecoins, the usual tokens they probably think of are USD Coin (USDC), Tether (USDT), or other dollar-backed tokens. That’s great if you’re transacting in US dollars, but if you’re one of the many others who prefer to use other currencies like euros, it may be another story.
The good news is that there’s already a euro-backed stablecoin called EURC, designed to bring the stability of the euro onto the blockchain. We’ll give you more details below.
What Is EURC and How Does It Work?
EURC is a digital token pegged 1:1 to the value of the euro. Just like how USDC represents a digital dollar, EURC represents a digital euro. This means that for every EURC in circulation, there should be a corresponding euro held in reserve by the issuer.
In practice, EURC works much like other fiat-backed stablecoins. You buy EURC on an exchange or through a wallet app. You can then use EURC for payments, trading, or DeFi activities.
Who Issues the EURC?
Behind EURC is Circle Internet Financial, more simply known as Circle, a global financial technology company founded in 2013 in Boston, USA. Circle’s mission is to make money move quickly with the transparency and stability of traditional finance.
Circle is the issuer behind USDC, too. With USDC, Circle has already built trust by proving that a fiat-backed stablecoin can be transparent, compliant, and widely adopted. That same expertise now powers EURC.
What Are the Benefits of Using EURC?
In case you’re wondering why someone would prefer EURC over holding fiat euros or using conventional payment rails, here are some of the key benefits:
1. Speed and 24/7 Settlement
Traditional bank transfers (especially cross-border) can take hours to days, especially outside business hours or across time zones. With EURC, transfers on blockchains can settle in seconds to minutes, any time of day. This means euro payments are global and near-instant.
2. Lower Cost or Capital Efficiency
By removing layers of intermediaries (banks, correspondent banks, clearing systems), EURC payments can reduce friction and fees, particularly across borders. Users pay on-chain transaction costs (gas, network fees) rather than legacy banking fees.
3. Programmability and Composability
Because EURC is a token on blockchains, it can plug into smart contracts, DeFi protocols, automated workflows, and decentralized applications. You can program money, whether it’s for automated euro lending, euro stablecoin swaps, or decentralized euro derivatives, etc.
4. Stability (Compared to volatile crypto)
While cryptocurrencies like Bitcoin (BTC) or Ether (ETH) can swing wildly, stablecoins are designed to hold steady. EURC’s peg to the euro gives users exposure to the euro’s value while avoiding dramatic volatility. This makes it more suitable for payments, reserves, or as a medium of exchange in crypto-native systems.
5. Euro Native Liquidity
Up until EURC, many stablecoins were dollar-denominated. For European users, or those doing business in euros, using a dollar-stablecoin introduces FX risk or conversion costs. EURC brings euro liquidity natively on-chain.
6. Transparency and Trust
Circle publishes monthly attestations confirming reserves backing EURC, using reputable accounting firms. Reserves are held in regulated institutions in the EEA (European Economic Area).
7. Interoperability with USDC and FX Rails
Circle supports near-instant EURC to USDC swaps (via their infrastructure), enabling users to move between euro and dollar liquidity in a seamless way. This opens up new synergies for FX, arbitrage, and liquidity management.
How EURC Is Backed and Pegged to the Euro
A stablecoin is only as strong as its backing. Let’s dig into how EURC achieves a reliable peg.
- 100% Reserve or Full-Backing
EURC follows the full-reserve model. Every EURC token in circulation corresponds to an equivalent amount of euro-denominated assets held in reserve. This ensures each EURC is redeemable for a euro.
The reserves may include euro-denominated cash, deposits, or equivalents held at regulated financial institutions in the EU/EEA region. Those reserves are “bankruptcy remote” structures to help insulate holders.
- Attestations and Transparency
To maintain trust, Circle issues attestation reports from independent auditors (often a Big Four accounting firm) that verify the reserves cover the circulating supply. These reports are published publicly on the Circle Transparency page, giving users visibility.
- Peg Stability
Because of the backing and redemption mechanism, EURC aims to stay pegged 1:1 to the euro. In normal conditions, market demand and arbitrage help maintain the peg. If EURC trades slightly above €1, arbitrageurs might mint new EURC and sell; if it trades below, they might redeem EURC for euros. That dynamic mechanism helps maintain price stability.
That said, no peg is perfect. Minor fluctuations (e.g. €0.9999 or €1.0001) can appear, due to market conditions and liquidity, but the goal is to keep EURC very tightly aligned with the euro.
- Interest-Rate and Reserve Risk
One subtle point is that the reserves produce yields (or cost interest), and their value may be sensitive to interest rates or credit risk. Circle absorbs that risk, rather than passing it directly on to EURC holders.
Use Cases of EURC in Crypto and DeFi
EURC has multiple use cases and emerging adoption:
- Payments & Remittances in Euros
Businesses or individuals can send EURC across borders like regular crypto transfers, but denominated in euros. This is useful for e-commerce, cross-border invoicing, payroll, or remittances, especially within Europe and globally. Because EURC settles faster, recipients get euro-value transfers without delays or foreign exchange friction.
- On-Chain Euro DeFi
DeFi protocols (lending, borrowing, yield farming, decentralized exchanges) have largely focused on USD-pegged stablecoins. EURC enables euro-denominated lending pools, euro stablecoin swaps, synthetic assets pegged to the euro or euro-linked instruments, structured products, etc.
For example, a lending pool might allow users to deposit EURC and earn interest, or borrow other assets using EURC as collateral. Or you could swap EURC for USDC, DAI, or other assets in decentralized exchanges, enabling cross-currency liquidity. Because EURC is interoperable across chains, it can plug into DeFi ecosystems already built for USDC.
- FX, Hedging, and Capital Efficiency
Because the EURC to USDC conversion is supported, traders can perform FX trading or hedging strategies natively on-chain. For example, if someone expects euro appreciation versus the dollar, they might hold EURC vs USDC. Or arbitrage between markets.
In capital markets, fund flows, trade finance, or tokenized assets denominated in euros can use EURC as a settlement layer.
- On- and Off-Ramp for Euro Liquidity
Institutions, fintechs, or exchanges can use EURC as a euro onramp/offramp mechanism, convert fiat euros into EURC, operate in crypto markets, then redeem back to physical euros. This simplifies euro liquidity management in crypto-native environments.
- Cross-Chain Bridging & Interoperability
Because EURC is issued across multiple blockchains and supported via Circle’s cross-chain infrastructure (e.g. Circle Mint APIs), EURC can be moved across chains (Ethereum, Solana, Avalanche, etc.). This enables euro liquidity to flow seamlessly in multi-chain ecosystems.
- Institutional and Corporate Uses
Large-scale entities (payment processors, crypto exchanges, treasury management, stablecoin issuance, B2B settlement platforms) may integrate EURC as a euro-denominated settlement layer.
Where to Buy and Store EURC
If you're interested in acquiring or holding EURC, the easiest way to get started is right inside Ka.app.
With Ka.app, you can buy, store, send, and spend EURC seamlessly. You don’t have to juggle multiple platforms or worry about complicated wallet setups. Everything you need to manage your euro-backed stablecoin is already in one secure app.
If you haven’t already, download Ka.app from the App Store or Google Play Store or sign up for an account here now.
Disclaimer: This article is for educational and informational purposes only, and should not be taken as financial, legal, or investment advice.
FAQs
Is EURC the same as a digital euro (CBDC)?
No. EURC is a private stablecoin, not a central bank digital currency. A “digital euro” would be a CBDC issued by the European Central Bank. EURC is issued by a private entity (Circle) with backing in fiat euro reserves.
How is the EURC backed and kept stable with the euro?
EURC is fully backed by euro-denominated reserves held in regulated institutions. It uses attestations, redemption rights, and arbitrage mechanisms to maintain a tight peg.
Which wallets support EURC storage?
Any wallet supporting the relevant blockchain (Ethereum, Solana, Avalanche, etc.) and tokens (ERC-20, SPL, etc.) can store EURC.
Can I use EURC for payments like USDC or USDT?
Yes, EURC is intended to be used for payments, transfers, remittances, etc., just like other stablecoins, but denominated in euro terms.
Is EURC safer than other stablecoins?
“Safer” depends on context. Its transparency, regulated backing, and Circle’s track record bolster trust. But since it is relatively new and smaller in scale than USDC or USDT, it may carry more adoption and liquidity risk.
What are the risks of using euro-backed stablecoins?
Risks include reserve mismanagement, regulatory changes, liquidity stress, smart contract bugs, redemption constraints, macro/interest rate risk, and competition.
