EURITE, or EURI, is a stablecoin, a novel form of cryptocurrency. A stablecoin is a digital currency linked to a stable asset, such as the Euro (€). This implies that 1 EURI is consistently intended to be equivalent to 1 Euro. In contrast to other cryptocurrencies, such as Bitcoin, which are prone to chaotic price fluctuations, EURI is engineered to maintain a consistent value, thereby simplifying daily transactions.

What is Eurite (EURI) Stablecoin?

Eurite (EURI) is a dual-chain, universally compatible stablecoin that operates under the BNB Smart Chain and is an ERC-20 token under the Ethereum network. Eurite is a BEP-20 token. The Euro-pegged stablecoin (EURI) issued by Banking Circle S.A. is intended to provide financial transactions with stability and efficacy. EURI, one of the first stablecoins to be licensed under MiCA, ensures that it complies with the most stringent E.U. regulations, thereby nurturing its customers’ trust and confidence. This stablecoin is collateralized with cash in euros on a 1:1 basis, thereby reducing the risks associated with digital assets and ensuring price stability.

The European Union has implemented a novel regulatory framework that establishes explicit guidelines for cryptocurrency companies, ensuring that they operate transparently and safeguard users. The MiCA regulation is designed to promote the adoption of innovative technologies by establishing a regulatory framework that safeguards the rights of holders in the EU by encompassing cryptoassets (including stablecoins), cryptoasset issuers, and cryptoasset service providers. Eurite’s compliance with MiCA signifies that it has undergone a comprehensive evaluation and satisfies stringent security, stability, and transparency criteria. In contrast to other stablecoins that may not be regulated, this renders it safer.

Features of Eurite (EURI)

Regulatory Compliance

EURI is subject to MiCA’s comprehensive regulation, which ensures transparency, financial stability, and consumer protection.

Stability

EURI aims to be a reliable medium of exchange due to the guaranteed 1:1 rate, which provides relative stability in the face of volatility.

Blockchain Integration

EURI, developed on the Ethereum and BNB Smart Chain, employs blockchain technology to facilitate the secure and rapid execution of token transactions.

Broad Spectrum of Applications

EURI facilitates the settlement of digital assets, facilitating the correct management of volatility exposure, remittances, and the execution of smart contracts within the DeFi landscape.

Background of Eurite (EURI)

Eurite (EURI) was developed by Banking Circle, a prominent bank headquartered in Luxembourg. The Euro pegged stablecoin in compliance with the Markets in Crypto Assets Regulation (MiCA) was launched on August 26, 2024. The first part of the MiCA regulation went into effect on June 30, 2024, referring to asset-backed and e-money tokens. This is when EURI was launched.

Banking Circle is an authorized credit institution headquartered in Luxembourg. Banking Circle maintains branches in the United Kingdom, Germany, Denmark, Singapore, and Australia. Eurite is unique because it is the first stablecoin to completely comply with MiCA (Markets in Crypto-Assets Regulation), a new set of regulations by the European Union that govern digital assets. This regulation guarantees that EURITE is secure, trustworthy, and stable.

Benefits of Eurite (EURI)

Eurite (EURI) aims to facilitate quicker and more efficient financial transactions for remittances, off-hour settlements, and decentralized finance by being available around the clock.

Out of Hours Settlement

Blockchain technology enables the 24/7 settlement of transactions. Participants in the financial market can use EURI as a settlement method outside of regular banking hours.

Segregated customer’s funds

Banking Circle’s safeguarded customer funds are exclusively utilized for designated purposes and are protected in the event of bankruptcy. All customer funds that Banking Circle receives as fiat currency for the purchase of the EURI are segregated in a distinct account from Banking Circle’s assets under the name “Safeguarded Customer Funds.” The holders of EURI will be acknowledged as the beneficiaries of the Safeguarded Customer Funds if EURI’s stability is jeopardized.

Remittances

EURI eliminates the friction associated with conventional cross-border transactions as an international payment solution. EURI permits fund transfers without delays or exorbitant fees, subject to applicable selling or distribution restrictions.

Decentralized Finance/Smart Contracts

EURI has the potential to be employed in smart contracts, which enable an infinite number of applications as the field of decentralized finance continues to evolve.

Volatility Vulnerability Management

EURI is intended to be resilient to volatility. EURI aims to maintain its pricing stability by being pegged 1:1 and guaranteed one-to-one by cash in Euros.

How Does Eurite (EURI) Work?

Banking Circle S.A. issues EURI following successful Know Your Customer inspections and onboarding. Institutional users, such as liquidity providers and exchanges, should be able to purchase EURI by depositing the equivalent quantity in euros into Banking Circle’s bank account.

Banking Circle promptly transmits an equivalent amount of EURI to the user’s wallet upon receipt of the deposit. These tokens will be subsequently traded, saved, or expended on various financial transactions. Upon its return to Banking Circle, the EURI is destroyed, and the corresponding Euro is refunded to the user’s bank account.

Eurite Technical Standards and Protocols

The Eurite tokens are issued on the Ethereum and BNB Smart Chain (“BSC”) blockchains, which adhere to the ERC-20 and BEP-20 protocols, respectively. The Proof of Stake mechanism (PoS) for the Ethereum blockchain and the Proof of Stake Authority (PoSA) for the BNB smart chain allow for consensus confirmation of transactions. These decentralized blockchains make records public and unchangeable for people involved in the public market.

The ecosystem of users is provided with the capability to integrate EURI into smart contracts by Ethereum and BSC, resulting in quicker, more stable, and frictionless settlements. EURI plans to issue on other blockchains to extend the token’s benefits to a broader range of developers and end users.

The initial issuance of EURI was conducted on channels compatible with the Ethereum Virtual Machine (“EVM”). These blockchain networks comply with the same standards and protocols as the Ethereum blockchain. For example, the token was introduced on the Ethereum and BNB Smart Chains, which adhere to the ERC-20 and BEP-20 standards, respectively.

Eurite’s Auditing

To guarantee that tokens in circulation are guaranteed 1:1, a top-tier auditor attests to the relationship between Banking Circle and EURI. PeckShield audited the smart contract and published the final version on June 18, 2024.

PeckShield examined the smart contract source code during the initial phase of the audit, and their in-house static code analyzer was applied to the codebase. PeckShield then conducted an additional manual evaluation of business logic, system operations, and ERC20-related aspects to identify potential pitfalls and bugs. Additionally, the blockchain security company explicitly assessed the provided contracts’ compliance with the standard ERC20 specification and other established best practices and their compatibility with other similar ERC20 tokens and current DeFi protocols.

Upon the audit’s conclusion, the blockchain security company discovered no issues regarding the compatibility of the ERC20 specification or other known ERC20 pitfalls/vulnerabilities. Additionally, no problems were identified in different areas, including business logic and coding practices, and the current deployment adhered to the best practices.

Eurite’s Related Risks

Eurite (EURI) is a regulated e-money instrument (stablecoin) that facilitates financial transactions by combining the simplicity of blockchain technology with the stability of traditional fiat currencies. Although the stablecoin has a strong interest foundation, there are potential risks.

Peg Risk

This refers to the possibility that the price of a token may diverge from its pegged value, typically 1:1, with a specific fiat currency, such as the Euro. An EMT is a crypto-asset that is designed to maintain its value by referencing a single, and only one, official currency. Nevertheless, peg risk may occur in the event of an abrupt shift in the demand or supply of a token. For instance, the price of a token may surpass its designated value if demand for it surges abruptly. Conversely, if the token’s demand declines, its price may fall below its specified value.

Liquidity Risk

Liquidity risks may be associated with tokens. This implies that it may be challenging to purchase or sell tokens, particularly during periods of market tension. It is important to note that the holder of EURI will have the right to redeem the token at par value directly with the issuer at any given time as a form of mitigation. This allows tokens to be converted into cash without engaging with another market participant on the secondary market.

Risks Associated with Technology

Smart Contracts Risk

Smart contracts efficiently manage transactions using numerous tokens constructed on blockchain technology. Smart contracts are computer programs that execute autonomously when specific conditions are satisfied. Purchasers may incur financial losses due to an error in the code or an improperly designed smart contract.

Blockchain Security Risk

This refers to the potential vulnerabilities or weaknesses in the design, implementation, or use of blockchain technology that could jeopardize the security and integrity of the blockchain network, its users, and the crypto assets held on it. The potential for attacks on the network or individual nodes is one of the primary security dangers associated with blockchain technology.

What is MiCA Regulation?

The European Commission (EC) established the Markets in Crypto-Assets (MiCA) regulation, a groundbreaking framework prioritizing financial stability. It is also intended to safeguard investors and encourage the extensive transformation of the crypto asset sector in European Union (EU) countries. MiCA is implementing some of the most effective practices already present in financial market regulations for the crypto industry.

MiCA is designed to promote the protection of users and investors while facilitating the adoption of blockchain and distributed ledger technology (DLT) as part of virtual asset regulation in the EU. The EU Parliament approved MiCA on April 20, 2023; however, it will be implemented entirely in December 2024.

MiCA Regulation’s Historical Background

On October 10, 2022, the EC’s Economic and Monetary Affairs Committee overwhelmingly approved the first-ever blockchain-related asset regulation. This decision paves the way for a vote by the entire European Parliament before the end of 2022.

Following the European Parliament’s formal approval on April 20, 2023, the EU’s Economic and Financial Affairs Council ratified the Act on May 16, 2023. Even though three consultation packages were published for public feedback, the regulation entered law in June 2023. Titles III and IV became applicable on June 30, 2024, and five additional titles (I, II, V, VI, and VII) will become applicable in December 2024.

MiCA creates a distinctive regulatory environment in the EU for crypto businesses, providing industry participants with a more transparent understanding of the overarching regulations. It is intended to provide security, uniformity, and transparency in the context of digital assets.

Titles in Crypto-Asset Markets

Mica is a component of a digital financing package designed to revolutionize the European economy. It has seven titles covering jurisdiction responsibilities, minimum provider requirements, authorization, and crypto-asset regulation. The regulation defines three categories: crypto-assets, e-money tokens, and asset-referenced tokens.

Markets in Crypto-Assets Title I

Offering and trading platform criteria for publicly sold crypto assets and businesses are under Title I, Article 1. Article 2 outlines who the rule relates to. Article 3 defines all legislative terminology, including distributed ledger technology, utility tokens, consensus mechanisms, and crypto asset services.

Markets in Crypto-Assets Title II

Title II outlines who can generate and offer cryptoassets to the public. An entity must meet specific criteria to produce and issue a crypto-asset that isn’t an asset-referenced or e-money token.

Markets in Crypto-Assets Title III

Title III of the EU defines asset-referenced tokens as tokens that use another asset or right to stabilize their value. Many call these stablecoins crypto assets whose value is connected to or backed by other assets like the euro or dollar.

Markets in Crypto-Assets Title III

Title IV defines who issues E-money tokens. E-money tokens are “electronic money” or crypto-assets representing formal currencies. An authorized credit or e-money institution must issue them. This title specifies the risks money issuers face when selling e-money tokens.

Markets in Crypto-Assets Title V

Title V specifies who can supply crypto-asset services and where in the Union. This title also authorizes service providers to deliver cross-border services if they notify their Member State authorities. It specifies security, governance, operational requirements, and client obligations.

Markets in Crypto-Assets Title VI

Title VI is the shortest title in the legislation. It discusses market misuse and its breadth. Insider trading, market manipulation, and public revelation of inside knowledge are also included.

Markets in Crypto-Assets Title VII

This title provides directions and a cooperative framework for authorities. Member states must select competent authorities to report to the EBA and ESMA.

Two additional titles (Titles VIII and IX) will be incorporated between June 2025 and June 2027. These will address the Commission’s obligation to provide a report to the European Parliament and the Council on the impact of the legislation and any subsequent developments.

Relevance of MiCA Regulation for Crypto

MiCA offers legal certainty regarding crypto assets, including cryptocurrencies, security tokens, and stablecoins. MiCA encompasses a variety of participants in the crypto market, such as custodial wallet providers, exchanges, trading platforms, and crypto-asset issuers. A benefit of the MiCA proposal is that it allows banks, investment firms, and other financial institutions to participate in crypto-market activities, provided they have been authorized to offer services.

In addition, MiCA endeavors to reduce the environmental consequences of cryptocurrencies. Some cryptocurrency mining necessitates using high-powered equipment that consumes substantial energy, which may be sourced from fossil fuels like coal. Additionally, the industry generates electronic waste and necessitates many computer components.

Conclusion

The introduction of Eurite (EURI), which Banking Circle S.A. issued, represents a significant step forward in regulated stablecoins. EURI provides its user base with stability and trust in its actions because it is backed by cash and adheres to the MiCA legislation.