Its price valuation uses the same concept as the US dollar stablecoins USDC and USDT, giving you the option to store and transact on blockchain networks in EUR or USD. Both options effectively reduce the risk of highly volatile price movements associated with other cryptos like Bitcoin, while giving you the transparency and pseudonymity of cryptocurrency transactions; however, it is worth noting that all transactions using EURC are traceable.

The benefit for you is that if you live in an EU country where the domestic currency is the euro, it makes more sense to hold and transfer EUR on blockchain networks rather than using USD stablecoins. I.e, you stay within the euro system.

Moreover, as with the large majority of traditional cryptocurrencies, when processing on-chain transactions, you don’t have to deal with banking delays.

What Is EURC?

EURC is a cryptocurrency issued by Circle. The organization decided to release a stablecoin pegged to the Euro.

1 EURC is typically worth €1 in fiat currency.

Its setup is ideal for those looking to store and transact in Euros using a low-volatility cryptocurrency, as an alternative to highly volatile assets such as Bitcoin and Ethereum. Consequently, EURC gives you price consistency. Also, it is backed by euro reserves held by the issuer, ensuring that the value of every EURC token is backed by its fiat equivalent.

Aside from price stability, EURC is useful for borderless payments. It’s ideal if you are looking for a borderless payment option with lower fees than you would pay with international transfers through traditional fiat-currency banking systems.

Originally, EURC used the Ethereum ecosystem; however, the network is known for high fees during periods of heavy congestion. To solve this issue and increase its popularity, EURC expanded its appeal by adding support for other mainnets such as Solana, Base and Avalanche, where transaction fees are typically lower than on the Ethereum blockchain.

How EURC Maintains Its Value

EURC maintains its value thanks to the setup implemented by Circle, the crypto’s issuer, which ensures that every token is backed by euro-denominated reserves.

In other words, for every EURC issued, Circle maintains the same fiat-currency equivalent balance. This strategy anchors each token value to help maintain its €1 target. As a result, the system’s supply expands when new euros enter circulation and contracts when users convert back to fiat.

For you, holding an EURC token gives you the benefits of transacting on the blockchain, and although it is a cryptocurrency, it’s different. You are effectively holding a claim on real euro reserves held in accounts within the fiat-currency banking system, which is how the token maintains its value.

How EURC Works Behind the Scenes

When people purchase tokens by depositing fiat currency, the system will mint new tokens. Conversely, when a token holder converts or withdraws their EURC, Circle pays out in euros and burns the tokens, thereby removing them from circulation.

This is what we call a minting-and-redemption process.

In other words, the supply has been designed to expand and contract according to demand. The end result of this setup is that each EURC token is supported by real-world euro reserves.

Why EURC Is Gaining Attention

EURC is gaining attention because the euro is a strong global currency, and blockchain technology offers a fast and affordable borderless transaction mechanism. Add the two together, and you have euro transactions using the speed and cost-effectiveness cryptocurrencies have become famous for.

Instant, borderless transitions: With traditional fiat currency, bank transfers are often restricted by the banking system’s opening hours. For example, a late-night transfer may not arrive until the next day, or a weekend transaction may not be processed by a bank until Monday. EURC removes the constraints of using banks as intermediaries, as the system runs 24/7, allowing transactions to be completed in just a few minutes.
Natural Fit for Digital Finance: EURC is increasingly used on blockchain platforms in situations where traditional euros are unavailable. We’ve seen its tokens being used on crypto trading platforms, DeFi networks, and on applications that require programmable money.
Eliminates Unnecessary Currency Conversions: EURC offers a stablecoin that lets you stay within the euro system, whereas previously the go-to option was to use a USD-backed stablecoin. With euro-pegged tokens, you can now simplify accounting and reduce exposure to exchange-rate fluctuations.

In short, EURC is gaining the attention of those already transacting within the euro monetary system and looking to take advantage of the many options blockchain tech offers, using a non-volatile stablecoin that matches their domestic currency.

What You Should Be Aware Of

As with any stablecoin, you should always be aware that, although the value of a token is pegged to a fiat currency, using it doesn’t come without risk. Of course, that very principle applies to EURC.

Circle (the issuer): The entire system comes down to Circle managing and maintaining its network transparently. That means Circle has to show you that it is acting responsibly, especially if you are buying a large number of tokens. If the issuer breaks your trust in any way, or if Circle comes under media scrutiny, EURC could lose its peg or face disruption.
No Privacy (in the traditional sense): Although you are using blockchain technology, purchasing EURC often requires KYC through exchanges. That means every transaction is publicly traceable on-chain. With that said, alternative DEX and self-custody routes do exist.
Regulations: Across Europe, stablecoins are increasingly being monitored and regulated. On the plus side, safety and oversight create a more trustworthy environment for transactions, but on the flip side, they can also affect the availability of EURC and how you use it to transact.
Technical Factors: It’s important to understand that, as it is a blockchain-based asset, EURC relies on smart contracts and network infrastructure. These systems are robust, but they are not immune to issues.
Self-custody (no guaranteed protection): If you store EURC in a self-custody wallet, i.e., you become the bank, unlike most non-stablecoin cryptos, you are not necessarily protected, as Circle has the ability to freeze tokens at specific addresses.

Not Cash: Never assume that EURC operates exactly like cash in a bank account. It depends on the issuer maintaining reserves and operations, and therefore, you are relying on the organization’s integrity and sound management of the EURC stablecoin ecosystem.

As long as you are aware of each of these points, you should be able to make an educated decision about whether EURC is a viable option for your situation.