STASIS Euro (EURS): an overview of the first euro-linked stablecoin

The emergence of stablecoins and the DeFi market has reduced transaction costs and eliminated centralized providers from the chain of intermediaries, so investors are no longer completely dependent on the actions of banks and other credit institutions.

However, the crypto market was dominated by stablecoins linked to the U.S. dollar exchange rate for a long time. Now, there are more and more new stablecoins tied to the price of other national currencies; one of them is STASIS Euro.

What is STASIS Euro?

STASIS Euro or EURS is a stablecoin linked to the exchange rate of the European Union's national currency, the Euro (EUR). The EURS stablecoin was issued initially on the Ethereum blockchain by Maltese fintech company STASIS (STSS Limited) in 2018. According to STASIS' claim, EURS was the first stablecoin in the crypto market to have its exchange rate pegged to the euro.

The STASIS Euro stablecoin also exists on the XDC Network. The bulk of STASIS Euro's liquidity is, of course, centered in the Ethereum ecosystem. Although this information is not available on CoinMarketCap, the official source indicates that EURS tokens are also available on the networks:

In 2022, an updated version of the STASIS Euro stablecoin appeared, which, thanks to an improved smart contract code, reduced commission costs by 30-35%.

According to CoinMarketCap, about 124 million EURS circulated on the market as of July 2024. After a prolonged decline in the crypto market, demand for the EURS stablecoin started to grow again in October 2023 as investors renewed their interest in cryptocurrencies. However, in over a year and a half, the capitalization of STASIS Euro has grown modestly by only $4 million, according to CoinMarketCap.

What is STASIS Euro backed by?

Stablecoins can be fully algorithmic, such as the infamous UST token that lost its peg to the U.S. dollar in 2022 and collateralized. Collateralized security serves as a protective mechanism for investors: if the rate of a stablecoin collapses, investors can receive compensation from the issuer's reserves. However, the collateral mechanism and the types of assets in reserves may differ from issuer to issuer.

For example, according to the official website of the EURS issuer, STASIS Euro stablecoin is 100% backed by Euro currency. Moreover, STASIS Euro reserves are kept in three different banks:

Prime E.U. custodian,
Lithuanian Central Bank,
Swiss Central Bank.

However, according to the same resource, there are only 32.4 million EURS in circulation, although CoinMarketCap indicates that the number of tokens is 124 million: the Etherscan blockchain observer confirms the same data. It remains unclear where another 91.6 million EURS came from and what they are backed by.

Pros and cons of STASIS Euro

The advantage of the EURS stablecoin is its peg to the euro, as there are few euro-equivalent alternatives on the cryptocurrency market, especially liquid ones. In addition to STASIS Euro, there are also euro-linked stablecoins:

Anchored Coin AEUR,
Tether EURt,
EURC,
Celo Euro (CEUR),
VNX Euro (VEUR).

However, STASIS Euro is the leading in capitalization and liquidity among all other EUR-linked stablecoins.

The disadvantages of STASIS Euro include regulatory restrictions: Like fiat currencies, stablecoins are subject to regulatory rules, and in case of their violation, penalties may be applied to legal entities and individuals. For example, the MiCA bill passed in 2023 prohibits the use of several stablecoins linked to the U.S. dollar exchange rate in the E.U.

Another disadvantage of STASIS Euro is the possibility of losing parity to the euro, i.e., decoupling from the fiat currency exchange rate with a further drop in value. Let's compare data from CoinMarketCap, Etherscan, and STASIS' official website. The amount of collateral is only about 26% of the amount of EURS tokens circulating on the market. In case of loss of parity to the euro, STASIS will be able to compensate only a quarter of the affected investors' funds. The situation is aggravated by the tiny liquidity of the stablecoin, which can provoke a decoupling of even small sales of up to several million dollars from the euro exchange rate.