Eurite (EURI) is one of the first "legal" stablecoins issued in the EU

Since MiCA came into effect, digital currency issuers that do not have the appropriate licenses to issue their digital assets in the EU are prohibited from providing access to their services to European residents. As a result, major players such as Tether (issuer of the USDT stablecoin) have had to leave the EU market at least until they acquire the necessary licenses.

While big companies are looking for a way to enter the EU market, issuers in the EU are issuing their stablecoins tied to the euro exchange rate and complying with regulators' rules.

What is Eurite?

Eurite or EURI is a new euro (EUR) exchange rate-linked stablecoin launched and listed on exchanges at the end of August 2024. The Eurite stablecoin is fully compliant with MiCA law, and its issuer, Banking Circle SA, has all the necessary licenses to do so.

The EURI token is 100% backed by euro reserves and is positioned as the world's first stablecoin regulated under the MiCA bill.

Banking Circle CA's reserves, backed by the Eurite stablecoin, are protected from the issuer's bankruptcy and are held in a separate account that is not linked to the company's assets under the Safeguarded Customer Funds Act of 2003.

This law ensures that all protected customer funds are used only for specific purposes and that the assets themselves will not be touched in the event of a Banking Circle CA bankruptcy. In particular, the law protects clients if the EURI stablecoin is decoupled from the euro. If the token's value falls significantly below EUR 1, clients can claim their funds from the reserve according to their balance sheet.

The smart contracts by which the EURI tokens were issued have been thoroughly audited, which confirms that reserves fully back the stablecoin. In addition, the security of the contracts has been checked and confirmed by the well-known company PeckShield.

About Eurite token

As of December 2024, the EURI stablecoin has been issued on two blockchain networks: an ERC-20 token based on Ethereum and a BEP-20 token on the BNB Smart Chain. The token issuance process itself is similar to other centralized stablecoins like USDT and USDC:

1. The client deposits euros into the Banking Circle CA account in a 1:1 ratio. To access the service, the investor must undergo the KYC (Know Your Customer) procedure for personal identification. Only institutional users can become Banking Circle CA clients: exchanges, liquidity providers, or trading platforms. Ordinary users can only purchase EURI tokens already issued on the market.
2. The Banking CA issuer issues the required number of EURI tokens using a special function of the Eurite smart contract and transfers them to the wallet of the institutional user.

Users can then use the tokens at their discretion. In the case of EURI redemption, the Banking CA issuer will burn the tokens and return the equivalent amount of EURI to the client's account.

According to data from the CoinMarketCap monitoring service, as of December 2024, the market capitalization of the Eurite stablecoin is $36.5 million, and the total number of tokens circulating on the market is 34.7 million EURI.

Since its listing, the EURI stablecoin has demonstrated intense volatility, and its exchange rate has changed significantly: if at the time of listing on exchanges, the token's value was $1.11, a month later, it dropped to $1.05.

Such volatility is due to the still relatively low liquidity of Eurite stablecoin. In addition, increased volatility in the first months of trading is quite common for stablecoins and other digital assets on the crypto market.

Conclusion

So far, Eurite is significantly inferior in market capitalization to even low-capitalized stablecoins such as the May 2022 collapsed TerraClassic USD (USTC), USDB, Pax Dollar (USDP), and EURC. Even the collapsed USTC stablecoin, which has a capitalization of $126.4 million as of December 2024, is nearly 3.5 times the EURI's value.

However, it should be taken into account that Eurite stablecoin appeared on the crypto market relatively recently, and investors still prefer to invest their funds in the most liquid assets of this sector, such as USDT, USDC, USDe, DAI, and FDUSD — their capitalization is over $1 billion.

In addition, there are few alternatives in the EU market where residents of this economic zone can trade. It is also worth considering that the demand for U.S. dollar-linked stablecoins is much higher than similar euro-linked assets.

For comparison, the capitalization of the EURt stablecoin issued by Tether is slightly higher than that of the EURI token. Therefore, Eurite's liquidity growth will directly depend on the dynamics of demand for euro-linked stablecoins in the future.