What is Eurite Stable Coin?

Eurite, abbreviated as EURI, is a new type of Cryptocurrency - Stable Coin. Stable Coin is a type of Digital Money pegged to stable assets (such as the euro €). This means that 1 EURI is always equivalent to 1 euro. Unlike Cryptocurrencies such as BTC with larger price Fluctuation, EURI aims to maintain value stability, facilitating daily transactions.

Characteristics of Eurite (EURI) stablecoin

Eurite (EURI) is a dual-chain, widely compatible Stable Coin that can be used both on-chain with BNB and circulated as an ERC-20 Token on the Ethereum network. As a BEP-20 Token, Eurite is issued by Banking Circle S.A. and pegged to the Euro, aiming to provide stability and efficiency for financial transactions. EURI is one of the first Stable Coins to obtain MiCA approval, ensuring compliance with the strictest EU regulations and enhancing user trust. This Stable Coin is backed by Euro cash at a 1:1 ratio, reducing the risk of digital assets and ensuring price stability.

The EU has introduced a new regulatory framework, providing clear guidelines for Crypto Asset companies to ensure transparent operations and protect user rights. The MiCA regulation establishes a regulatory framework covering encryption assets (including stablecoins), issuers, and service providers, safeguarding the rights of holders in the EU and promoting the application of new technologies. Eurite complies with MiCA requirements, meaning it has undergone comprehensive assessment and meets strict security, stability, and transparency standards. Compared to other unregulated stablecoins, Eurite is safer and more reliable.

Features of Eurite (EURI)

Compliance

EURI is subject to comprehensive regulation by MiCA, ensuring transparency, financial stability, and consumer protection.

Stability

By guaranteeing a 1:1 exchange ratio, EURI aims to become a reliable exchange medium, providing relative stability in market fluctuations.

Blockchain integration

EURI is developed based on Ethereum and BNB Smart Chain, using blockchain technology to facilitate secure and fast execution of Token transactions.

Widely used

EURI facilitates the Settlement of digital assets, helping to manage Fluctuation risks, remittances, and execute Smart Contracts in the field of Decentralized Finance (DeFi).

Background of Eurite (EURI)

Eurite (EURI) was developed by Banking Circle, a well-known bank based in Luxembourg. This Euro stablecoin, which complies with the Markets in Crypto-Assets Regulation (MiCA), was officially launched on August 26, 2024. The first part of the MiCA regulation came into effect on June 30, 2024, covering asset-backed and Electronic Money Tokens, which is also the time when EURI was launched.

Banking Circle is an authorized lending institution based in Luxembourg with branches in the UK, Germany, Denmark, Singapore, and Australia. What sets Eurite apart is that it is the first stablecoin fully compliant with MiCA (Market in Crypto-Assets Regulation), a new regulation introduced by the EU for digital assets. This regulation ensures the safety, reliability, and stability of EURITE.

Advantages of Eurite (EURI)

Non-working hours Settlement

Eurite (EURI) aims to provide faster and more efficient financial transactions for remittance, non-working hour settlement, and decentralized finance through 24/7 availability. Blockchain technology enables 7-day, 24-hour transaction settlement. Participants in the financial market can use EURI for settlement outside regular banking hours.

Isolated Client Funds

Banking Circle's protected client funds are used only for specified purposes and are protected in the event of bankruptcy. All funds used by clients to purchase EURI in legal tender are segregated in a separate account called "protected client funds," separate from Banking Circle's own assets. If the stability of EURI is affected, the holders of EURI will be considered beneficiaries of these protected client funds.

Remittance

As an international payment solution, EURI eliminates the friction of traditional cross-border transactions. Under applicable sales or distribution restrictions, EURI allows for fund transfers without latency or high fees.

Decentralization Finance/Smart Contract

With the continuous development of the Decentralized finance field, EURI has the potential to be used in smart contracts, thus achieving unlimited application possibilities.

Volatility Management

EURI aims to withstand market Fluctuation. By being pegged 1:1 with the Euro and backed by Euro cash on a one-to-one basis, EURI is committed to maintaining the stability of its price.

How does Eurite (EURI) work?

After successfully completing customer identity verification (KYC) and account opening, Banking Circle S.A. issues EURI. Liquidity providers and exchange institutions can purchase EURI by depositing an equivalent amount of euros into Banking Circle's bank account.

After receiving the deposit, Banking Circle will immediately transfer an equivalent amount of EURI to the user's Wallet. These Tokens can then be traded, stored, or used for various financial transactions. When the EURI is returned to Banking Circle, these Tokens will be destroyed, and the corresponding euros will be refunded to the user's bank account.

Technical Standards and Protocols of Eurite (EURI)

Eurite Token is issued on the ETH block and the BNB Smart Chain (BSC), following the ERC-20 and BEP-20 protocols respectively. The ETH block chain adopts the Proof of Stake mechanism (PoS), while the BNB Smart Chain adopts the Proof of Stake Authorization mechanism (PoSA) to achieve Consensus confirmation of transactions. These Decentralization block chains enable participants in the public market to view records openly and immutably.

Through Ethereum and BSC, users can integrate EURI into Smart Contract, achieving faster, more stable, frictionless Settlement. EURI plans to expand its advantages to a wider range of developers and end users through on-chain issuance in other Blocks.

The initial issuance of EURI was conducted on channels compatible with the Ethereum Virtual Machine (EVM). These blockchain networks follow the same standards and protocols as Ethereum. For example, tokens are launched on the Ethereum and BNB smart on-chain, following the ERC-20 and BEP-20 standards, respectively.

Eurite Audit

To ensure the 1:1 guarantee of the circulating Token, a top audit firm has verified the relationship between Banking Circle and EURI. PeckShield audited the Smart Contract and released the final version on June 18, 2024.

In the initial stage of the audit, PeckShield checked the Source Code of the Smart Contract and analyzed the codebase using its internal static code analyzer. Subsequently, PeckShield further manually evaluated the business logic, system operations, and ERC20-related aspects to identify potential pitfalls and vulnerabilities. In addition, this blockchain security company explicitly assessed the standard ERC20 specification compliance of the provided contracts, established best practices, and their compatibility with other similar ERC20 Tokens and current Decentralized Finance protocol.

After the audit, the blockchain security company did not find any issues regarding ERC20 specification compatibility or known ERC20 pitfalls/bugs. In addition, no issues were found in other areas such as business logic and coding practices, and the current deployment follows best practices.

Relevant Risks of Eurite (EURI)

Eurite (EURI) is a regulated Electronic Money tool (stablecoin) that promotes financial transactions by combining the simplicity of blockchain technology with the stability of traditional fiat currencies. Although this stablecoin has a solid foundation, there are still potential risks.

Risk linked

The risk of pegging refers to the possibility that the price of a Token may deviate from its value pegged to a specific legal currency (such as the Euro) at a 1:1 ratio. EMT (Electronic Money Token) is an encryption asset designed to maintain its value by referencing a single official currency. However, there may be pegging risks when the supply and demand relationship of the Token suddenly changes. For example, if there is a sudden increase in demand for the Token, the price may exceed the predetermined value. Conversely, if demand decreases, the price may be lower than the specified value.

Liquidity Risk

Tokens may face Liquidity risks, which means buying and selling Tokens can become difficult during market tightness. It should be noted that EURI holders have the right to redeem Tokens directly from the issuance party at face value at any time as a mitigation measure. This allows Tokens to be converted into cash directly without the need to trade with other participants in the Secondary Market.

Risks Related to Technology

Smart Contract Risks

Smart Contract uses a variety of Tokens built on Blockchain technology to efficiently manage transactions. They are computer programs that are automatically executed when specific conditions are met. Due to code errors or improper Smart Contract design, buyers may suffer economic losses.

Blockchain Security Risks

This refers to the vulnerabilities or weaknesses that may exist in the design, implementation, or use of Blockchain technology, which may jeopardize the security and integrity of the Blockchain network, as well as its users and the encryption assets held. Attacks on the network or individual Nodes are one of the main security risks related to Blockchain technology.

What is MiCA regulation?

The European Commission (EC) has developed the Markets in Crypto-assets Regulation (MiCA), which is a pioneering framework with financial stability at its core. It aims to protect investors and drive the comprehensive transformation of the EU's crypto-asset industry. MiCA is introducing some of the most effective existing practices in financial market regulation to the crypto industry.

The purpose of MiCA is to promote the adoption of blockchain and Distributed Ledger Technology (DLT) while protecting users and investors. This is part of the EU's regulation on virtual assets. The European Parliament approved MiCA on April 20, 2023, but it will be fully implemented in December 2024.

Historical Background of MiCA Regulations

On October 10, 2022, the Economic and Monetary Affairs Committee of the European Commission (EC) overwhelmingly approved the first asset regulatory regulation related to Blockchain. This decision paves the way for the entire European Parliament to vote by the end of 2022.

After being officially approved by the European Parliament on April 20, 2023, the Council of Economic and Financial Affairs of the European Union officially passed the bill on May 16, 2023. Despite three consultative proposals being released for public feedback, the regulation will still take effect in June 2023. Chapters 3 and 4 will take effect on June 30, 2024, while the remaining five chapters (Chapters 1, 2, 5, 6, and 7) will take effect in December 2024.

MiCA has created a unique regulatory environment for encryption enterprises in the European Union, providing industry participants with a more transparent understanding of the overall regulations. It aims to provide security, consistency, and transparency for the digital asset field.

Chapter on the encryption asset market

MiCA is part of a digital finance solution aimed at revolutionizing the European economy. It consists of seven chapters, covering judicial responsibilities, minimum requirements for providers, authorization, and regulation of encryption assets. The regulation classifies assets into three categories: encryption assets, Electronic MoneyToken, and asset reference Token.

Chapter One of the encryption asset market

Article 1 stipulates the standards for the public sale of encryption assets and the issuance and trading platform of enterprises. Article 2 outlines the scope of application of the regulations. Article 3 defines all legal terms, including Distributed Ledger technology, utility Token, Consensus Mechanism, and encryption asset services.

Chapter 2 of the encryption asset market

Chapter 2 explains who can generate and provide encryption assets to the public. To produce and issue non-asset referenced or non-Electronic MoneyToken encryption assets, entities must meet specific criteria.

encryption Asset Market Chapter Three

Chapter 3 defines asset-backed Tokens, which use other assets or rights to stabilize their value. Many people call these stablecoins, which are encryption assets whose value is related to or supported by other assets (such as euros or dollars).

encryption Asset Market Chapter Four

Chapter 4 stipulates who can issuanceElectronic MoneyToken. Electronic MoneyToken represents "Electronic Money" or encryption assets. They must be issuance by authorized credit institutions or Electronic Money institutions. This chapter details the risks faced by currency issuers when selling Electronic MoneyToken.

Chapter Five of the encryption asset market

Chapter 5 specifies who can provide encryption asset services within the European Union. This chapter also allows service providers to offer cross-border services with notification to their national authorities. It sets out security, governance, operational requirements, and obligations to customers.

Chapter 6 of the encryption asset market

Chapter six is the shortest chapter in the regulation, discussing market abuse and its scope. The content also includes insider trading, market manipulation, and the public disclosure of insider information.

Chapter 7 of the encryption asset market

This chapter provides guidance and cooperation framework for competent authorities. Member States must designate qualified competent authorities and report to the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA).

In addition, two additional chapters (Chapter 8 and Chapter 9) will be incorporated between June 2025 and June 2027. These chapters will involve the obligation of the Committee to submit reports to the European Parliament and the Council on the impact of the regulation and any subsequent developments.

The Impact of MiCA Regulations on Cryptocurrency

MiCA provides legal certainty for encryption assets, including cryptocurrencies, security tokens, and stablecoins. It covers various participants in the encryption market, such as custodial wallet providers, exchanges, trading platforms, and encryption asset issuers. One advantage of the MiCA proposal is that it allows banks, investment firms, and other financial institutions to participate in encryption market activities, provided they are authorized to do so.

In addition, MiCA is committed to reducing the environmental impact of Crypto Assets. The mining of some Crypto Assets requires the use of high-powered equipment and consumes a lot of energy, which may come from fossil fuels such as coal. This industry also generates electronic waste and requires a large number of computer components.

Conclusion

The launch of Eurite (EURI) by Banking Circle S.A. marks an important advancement in the regulated stablecoin issuance field. With cash backing and compliance with MiCA regulations, EURI provides stability and trust for its user base.