E-Money, a stablecoin issuer operating on the Cosmos network, has announced that it will no longer issue eEUR, a Euro-backed stablecoin, as of January 9. Users who hold eEUR can either redeem the stablecoin for Euros directly through e-Money until March 6, 2023 or exchange it for other assets on the Osmosis platform.
Deciding to unwind the EEUR issuance was not an easy decision. e-Money was founded in 2017 with a vision to capture significant stablecoin market share and be a reliable and trusted building block for global financial inclusion. Given the current market conditions, that effort has unfortunately reached a stage where it is prudent and responsible to wind it down.
e-Money wrote in the announcement.
e-Money has stated that EEUR stablecoin redemptions will be honoured until March 6. Customers with funds less than 100,000 eEUR can unwind their positions by exchanging tokens directly in the stablecoin market on Osmosis, Cosmos’ largest decentralised exchange.
Their tokens can be exchanged for USDC or Cosmos-native assets such as atom and osmo. To avoid market congestion and price slippage, e-Money advised users to unwind their positions in small batches.
Customers who want to redeem amounts greater than 100,000 EEUR can do so directly for euros, according to the announcement. These users will be subjected to customer identification checks, which could take up to five business days.
According to e-Money, while it was not directly affected by the negative events in 2022, the stablecoin business relies heavily on integration with traditional finance, and financial institutions’ interest in cryptocurrency has waned, posing a challenge to e-Money.
Furthermore, demand for non-USD stablecoins is low, and the upcoming European MiCA legislation is expected to limit the scalability of Euro-backed stablecoins and the sector’s business opportunities. As a result, e-Money decided to discontinue the issuance of eEUR.
The e-Money blockchain will continue to operate, and a chain upgrade in Q1 2023 will integrate the most recent Cosmos SDK features and allow governance to control features such as inflation rate and issuers.
