EURC and euro stablecoins for businesses: what EU treasury teams need to know
Euro stablecoins let businesses hold and move euro value on blockchain rails. Here is how they work, how MiCA treats them, and what matters for EU treasury teams.
Damex, Editorial team4 min read
A euro stablecoin is a stablecoin that references the euro, letting a business hold and move euro value over blockchain rails. Euro-denominated stablecoins such as EURC are, under MiCA, generally issued as e-money tokens, which reference a single official currency and carry a redemption right at par. For an EU business, a euro stablecoin is a way to use blockchain settlement while staying in euro, without converting into a dollar-denominated asset.
What a euro stablecoin is
A euro stablecoin references the euro and aims to hold a steady one-to-one value against it. It lets value move over blockchain rails while staying denominated in euro, which matters for a business that prices, invoices and reports in euro and does not want foreign-currency exposure in its settlement layer. See our explainer on what a stablecoin is for the underlying mechanics.
How MiCA treats euro stablecoins
Under MiCA, a stablecoin that references a single official currency such as the euro is generally an e-money token. That classification brings specific rules on issuance, reserves and redemption, and a redemption right at par against the issuer. For a business, the practical point is that a euro stablecoin issued as an e-money token sits within a defined regulatory framework, rather than being an unregulated token. Electronic money tokens, although a classification of crypto-asset under MiCA, are also considered to be funds that are subject to Europe's payments regulations. Some of the overlaps of regulations are still to be determined in future regulations.
Why euro treasury teams look at them
For a treasury team in the EU, a euro stablecoin offers blockchain settlement speed without stepping out of euro. It can move value across borders and settle outside banking hours, while the amount stays denominated in the currency the business already works in. That avoids adding a currency conversion, and the foreign-exchange risk that comes with it, just to use blockchain rails.
What to check before using one
Check that the token is issued as an e-money token under MiCA, who the issuer is and the strength of the redemption right, how it fits your conversion and payout flows, and how the regulated custody and settlement are provided. Also check whether any business transferring, exchanging or custodying e-money tokens has appropriate payment permissions. A euro stablecoin is only as useful as the infrastructure around it.
Where Damex fits
Damex supports stablecoin conversion, settlement and payouts within a regulated framework, so a business can use euro stablecoins for payments while counterparties receive local fiat, without taking on long-term volatile crypto asset exposure. In respect of servicing within the EU, Damex Digital Ltd is authorised by the Malta Financial Services Authority as a Crypto-Asset Service Provider and a Financial Institution under MiCA and the FIA. Damex holds both of the relevant authorisations to handle and administer e-money tokens in Europe.
Frequently asked questions
What is a euro stablecoin?
It is a stablecoin that references the euro, letting a business hold and move euro value over blockchain rails while staying denominated in euro.
Is EURC an e-money token under MiCA?
A euro-denominated stablecoin that references the single currency is generally issued as an e-money token under MiCA, which brings specific rules on reserves and redemption. Always check the issuer and classification.
Why would a treasury team use a euro stablecoin instead of a dollar one?
To get blockchain settlement without stepping out of euro, avoiding a currency conversion and the foreign-exchange risk that comes with it.
Are euro stablecoins regulated?
In the EU, euro stablecoins issued as e-money tokens fall within MiCA, with defined rules on issuance, reserves and redemption.
Disclaimer
This article is for information purposes only and does not constitute financial, investment, tax or legal advice. Crypto-assets and stablecoins are high risk. Their value can go down as well as up and you may lose the full value. Stablecoins, including e-money tokens and asset-referenced tokens, may lose their peg, and redemption rights are generally against the issuer, not Damex. Crypto-asset services are not covered by deposit guarantee or investor compensation schemes. In the EEA, crypto-asset services are provided by Damex Digital Ltd, authorised by the Malta Financial Services Authority as a CASP under MiCA (EU) 2023/1114. Crypto-asset services and payment services are provided under separate regulatory frameworks. Availability depends on your jurisdiction and is set out in the relevant terms and conditions.