e-Money, a major stablecoin issuer, has announced that it will no longer produce EURR stablecoins. e-Money pointed (1) out that the European MiCA regulation will probably make it more difficult to scale Euro-backed stablecoins, further reducing the number of commercial prospects available in the market.
Stablecoin issuer e-Money has discontinued its issue, citing the present market circumstances as the reason. This decision comes about 15 months after the company launched its Euro-pegged stablecoin EURR on the market.
What is EURR Stablecoin?
The most recent declaration made by e-Money said that the company would no longer be issuing new currency as of January 9th. Additionally, they stated that they will keep their support for the issuance of the stablecoin until March 6th.
On top of that, users can trade their EURR stablecoins for other digital assets on the Cosmos decentralized market known as Osmosis. These other digital assets include OSMO, ATOM, and USD Coin.
When dealing with more than 100,000 EURR, e-Money recommends that customers directly redeem their funds for euros with e-Money A/S. The company observed:
"This requires KYC/AML, and you should expect the processing to take around 5 business days.
In order to redeem to use this method, please send an email to email@example.com. e-Money mentioned the following in their subsequent statement:
"Coming to the conclusion that we should cancel the issuing of EEUR was not a simple task. e-Money was established in 2017 to seize a major portion of the stablecoin market and become a foundational component that can be relied upon and trusted for global financial inclusion. Unfortunately, in light of the state of the market, as it is right now, we have reached the point where it is both reasonable and smart to begin winding down our efforts.
Challenges Facing the Crypto Market
In contrast to the glory times of 2020-21, the crypto currency market experienced significant volatility in the previous year. In addition, e-Money stated that the absence of practical uses for blockchain has resulted in a decrease in the market for stablecoins that are not based on the USD.
They said that the planned European MiCA law would almost certainly be a barrier to the scaling of Euro-backed stablecoins and significantly restrict chances for business in the field.
"In its current iteration, the European MiCA legislation gives preference to commercial banks as potential issuers of Euro stablecoins. This is detrimental to innovation inside the European Union. Because of this, the e-Money team has concluded that the issuance of EEUR should be canceled," stated e-Money.
As was previously mentioned, the crypto currency industry saw significant headwinds throughout the final year of 2022. Concurrently, both centralized and decentralized platforms encountered challenges during this period.
Consequently, there has been a notable decrease in people's interest in the crypto currency market. Even while there is no direct impact on e-Money, the business of stablecoins is strongly dependent on integration with conventional forms of finance.
The demand for stablecoins has been decreasing as the crypto currency sector as a whole has been showing signs of slowing down.