Revolut is pushing its cryptocurrency ambitions a significant step further. The fintech, used by tens of millions of clients worldwide, is starting to introduce its own euro-pegged stablecoin EURR in Europe. It comes at a time when European MiCA regulation is changing market rules and the dominant dollar-based Tether is gradually disappearing from some platforms’ offerings. For Revolut, this could be not only a new cryptocurrency product, but a first step toward making stablecoins a common part of payments and money transfers.
Stablecoins were still primarily a tool for cryptocurrency traders just a few years ago. Today, banks, card companies, and the world’s largest fintechs are interested in them. Further proof is Revolut, which has started making its first stablecoin designated EURR available to European customers.
The new digital token is designed to replicate the value of the euro at a one-to-one ratio. One EURR should therefore correspond to one euro. Revolut is starting with gradual testing among selected clients in Denmark, Poland, and Portugal and plans broader availability later this year. According to the company, this is just the beginning. Stablecoins pegged to other currencies are also in preparation.
At first glance, this may seem like just another cryptocurrency in an app that already allows trading in hundreds of digital assets. However, the significance of EURR is much broader. Revolut is attempting to link traditional bank accounts, cryptocurrencies, and blockchain so that users can move value between them without needing to use a dollar-based stablecoin.
Table of Contents:
What is Revolut EURR and how is it supposed to work?
EURR belongs to the stablecoin category, meaning digital tokens designed to maintain a stable price against a specific asset. While Bitcoin or Ethereum can significantly rise or fall in price during a single day, EURR’s value is meant to remain around one euro. From the European regulation perspective, it is specifically an e-money token, an electronic money token pegged to one official currency.
Although the stablecoin bears the Revolut brand, its legal issuer is not Revolut directly. EURR is issued by Luxembourg-based company Bridge Building, which belongs to American company Bridge owned by payment giant Stripe. Bridge Building operates as a regulated electronic money institution under the supervision of Luxembourg regulator CSSF.
Revolut subsequently distributes the token to customers through its European cryptocurrency company Revolut Digital Assets Europe, which has a license under MiCA from Cypriot regulator CySEC.
According to Revolut, EURR is meant to create a simple connection between traditional money, cryptocurrencies, and blockchain wallets. The token is being introduced in the first phase on the Ethereum network, with additional blockchain networks and features to follow in the future.
Don’t miss: Top 10 Cryptocurrencies Under $1
Why does Revolut even need its own stablecoin?
The reason is well illustrated by the current structure of the stablecoin market. Stablecoins have a total value exceeding $300 billion according to the European Central Bank, but the vast majority of them are pegged to the US dollar. Approximately 90 percent of the market is moreover according to ECB President Christine Lagarde controlled by two major issuers – Tether and Circle.
This creates a somewhat strange situation for Europeans. A person can earn, save, and pay in euros, but if they want to use stablecoins on the blockchain, they very often must first switch to a dollar-pegged token. Revolut wants to eliminate this step.
“Millions of our customers earn, save, and spend in euros,” the company explains. EURR is meant to enable them to move euro value directly onto the blockchain without simultaneously taking on the exchange rate risk of the US dollar.
This could be significant, for example, in international transfers, transfers between cryptocurrency wallets, or in the future for payments and settlement of commercial transactions.
Revolut has one advantage that most stablecoins don’t have
Technologically, creating a new euro stablecoin is not in itself revolutionary. EURR is moreover entering a market where, for example, EURC from Circle or several other European projects already operate. However, Revolut’s advantage is something else – distribution.
Revolut reports more than 80 million users and more than 16 million of its customers use cryptocurrency services. This means the company doesn’t have to first laboriously introduce the new stablecoin to the cryptocurrency community and convince exchanges to start supporting it. It can gradually get it directly into an app that millions of people use for regular banking.
Read also: yPredict: Revolutionary Platform for Cryptocurrency Prediction
At the same time, Revolut is restricting Tether
The timing of the new stablecoin launch is important for another reason. Revolut is completing the gradual removal of Tether’s USDT from its retail offering in the European Economic Area and Switzerland, according to information from Blockhead.
According to the media, USDT purchases were already restricted during July, then Revolut stopped new deposits, and the entire process is to be completed by August 31. The reason is European MiCA regulation.
EU rules require that the issuer of an electronic money token offered to European customers meet established regulatory requirements and be, among other things, authorized as a credit institution or electronic money institution.
Tether has not secured European authorization under MiCA for USDT. A number of platforms have therefore restricted or removed its availability for European customers in recent months. Coinbase, Crypto.com, Kraken, and OKX, for example, have already gone down a similar path.
Revolut is thus in practice simultaneously restricting one of the world’s largest dollar stablecoins and building its own alternative denominated in euros.
Don’t miss: BITmarkets.com: Crypto Exchange Review That’s Rewriting the Rules
What does EURR mean for Revolut customers in the Czech Republic?
Czech clients will have to wait for now. The first phase of the launch is intended for selected users in Denmark, Poland, and Portugal. However, Revolut states that other European markets are to follow. The Czech Republic is among the European Economic Area countries where Revolut offers its services, but the company has not yet announced a specific date for introducing EURR to Czech customers.
If the product expands as expected, it could in the future enable, for example, easier transfer of euros between Revolut and an external cryptocurrency wallet or use of euro funds directly in blockchain applications.
For the average customer, however, the significance of the stablecoin will only fully manifest when its use extends beyond cryptocurrency trading.
Don’t miss out: MadisonSix
