​e-Money announces the cessation of the issuance of its euro-backed stablecoin

What’s new? e-Money, the issuer of the euro-backed EEUR stablecoin, has published the news about the cessation of further issuance of the digital asset. According to the official message on the Medium platform, the main reason for stopping the project was the bearish phase of the market. According to the company, the problems of the crypto industry in 2022 weakened the interest of traditional finance, which is crucial for the development of the stablecoin sector.

The full version of the message

e-Money was founded in 2017. The company worked closely with regulators to develop a transparent and compliant stablecoin model that takes into account negative interest rates in the eurozone. The issuance of EEUR stablecoins began in 2020. Initially, the Ethereum bridge was used for this purpose, later Cosmos IBC and Axelar were connected. The mainnet with instant payments and an exchange for decentralized asset exchange was launched in 2022.

What else is known? The e-Money team said it will accept payments in EEUR until March 6, 2023. Customers with less than 100 000 EEUR will be able to exchange their tokens for other stablecoins or assets based on the Cosmos blockchain through the decentralized Osmosis platform. e-Money advised opening positions in small batches to reduce market stress and price slippage. For owners of the stablecoin for amounts exceeding 100 000 EEUR, there is an option of direct exchange into euros. This requires an identification process (KYC), which takes up to five days.

e-Money stressed the difficulty of deciding to wind down the project. “Given the current market conditions, that effort has unfortunately reached a stage where it is prudent and responsible to wind it down,” the announcement says.

The company also noted that the European Union’s Markets in Crypto Assets (MiCA) bill would hinder the scaling of Euro-backed stablecoins, limiting business development opportunities. The document was approved by the EU Council of Ministers in October 2022, with entry into force expected in 2024. Among other things, it will also limit the trading of unbacked euro stablecoins to 200 million EUR per day. In addition, in October, the European Commission began investigating technological options for real-time supervision of the DeFi sector.

In December 2022, the European Central Bank issued a second report on the digital euro, outlining options for developing and distributing the asset. So far, the ECB has not decided which technology it will rely on for settlement: traditional, blockchain, or a combination of both.