Key Insights:
- Coinbase introduces fee-free EUR-to-EURC conversion and a new EURC-USDC order book for seamless stablecoin trading.
- Euro-pegged stablecoins grow, making up 92% of non-USD stablecoin supply on Ethereum, driven by Coinbase and MiCA regulations.
- Coinbase’s Base network gains users, boosting Ethereum’s web3 ecosystem as the company surpasses revenue expectations for Q2 2024.
Coinbase Global Inc. announced plans to launch a one-to-one conversion between the euro (EUR) and the euro-pegged stablecoin EURC. This new feature, set to be available on August 28, 2024, will allow users to convert their fiat euros into EURC without incurring any fees on Coinbase Advanced. The move aligns EURC with USD Coin (USDC), which is also backed by its corresponding fiat currency.
EURC’s compliance with the European Union’s Markets in Crypto Assets (MiCA) regulation was confirmed by Coinbase. The company highlighted that these changes aim to facilitate smooth and efficient transactions between fiat currencies and stablecoins on its platform.
New EURC-USDC Order Book Launch
Following the activation of the EUR-to-EURC conversion, Coinbase will introduce a EURC-USDC order book. This new listing will coincide with the deprecation of the current EURC-EUR and EURC-USD order books. Coinbase emphasized that these adjustments are intended to enhance the efficiency of trading and conversion activities involving stablecoins.
The EURC-USDC order book will provide a direct trading route between the euro-pegged EURC and the US dollar-pegged USDC, offering users a streamlined trading experience. The company believes this initiative will further encourage the use of euro-pegged stablecoins in the crypto market, particularly as interest in alternatives to USD-pegged stablecoins grows.
EUR Stablecoins’ Role in the Crypto Market
As of now, USD-pegged stablecoins continue to dominate the market, but euro-pegged stablecoins, including EURC, are gaining traction. Euro-pegged stablecoins currently account for 92% of the supply of non-USD stablecoins on the Ethereum network, indicating a growing interest in stablecoins denominated in euros.
The entry of MiCA regulations in the European Union is anticipated to further boost the presence of euro-pegged stablecoins in the market. Some industry insiders, however, have expressed concerns about the potential risks that MiCA’s requirements might pose to EU-licensed stablecoins.
Notably, Tether’s CEO, Paolo Ardoino, voiced worries about the possible vulnerabilities these stablecoins could face under the new regulatory framework.
Expansion of the Stablecoin Market
The stablecoin market is expanding, with traditional financial services increasingly adopting these digital assets. For instance, PayPal’s stablecoin, PYUSD, saw considerable growth on the Solana blockchain in July 2024.
Data from DefiLlama revealed that the circulating supply of Solana-based PYUSD increased by 230% during this period, reaching nearly $252 million. Ethereum-based PYUSD tokens also maintain a strong presence, with 56.6% of the total supply on the Ethereum network.
Ripple Labs Inc. is also working on launching its USD-pegged stablecoin, RLUSD, although there are concerns that this move could attract scrutiny from the U.S. Securities and Exchange Commission (SEC). Despite these regulatory uncertainties, some in the XRP community view the potential release of RLUSD as a possible resolution to Ripple’s ongoing legal issues with the SEC.
Coinbase’s Financial Performance and Base Network Growth
Coinbase’s recent financial performance has been robust. The company reported $1.45 billion in revenue for the second quarter of 2024, surpassing analysts’ expectations. This strong performance has driven a 20% year-to-date increase in Coinbase’s share price, with shares up 179% over the past year, reaching approximately $205.
The company’s Base network, an Ethereum-based layer two (L2) scaling solution, has also seen substantial user growth. The Base network’s reliability and support from Coinbase and its partners have contributed to its adoption, further solidifying Ethereum’s position in the web3 ecosystem.
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