EEUR, the Euro-backed stable-coin built on Cosmos, has ceased issuance effective from January 9th, 2023.
The Danish company e-Money announced the news via their Medium blog on Monday.
In the post, e-Money advised that they will "support redemption until March 6th, 2023, after which further redemption will assessed case by case".
Why are e-Money ceasing the EEUR?
e-Money began issuing EEUR stablecoins in 2020, initially using Ethereum bridging technology and later incorporating Cosmos IBC and Axelar.
The terminating of EEUR issuance has been attributed by the company to current market conditions, outling how "the stablecoin business relies heavily on integration with traditional finance, and financial institutions’ interest in cryptocurrency has waned following the events of 2022."
Also to blame is upcoming European MiCA legislation:
"Additionally, the lack of real-world applications for blockchain has led to low demand for non-USD stablecoins, and the upcoming European MiCA legislation is expected to hinder the scalability of Euro-backed stablecoins and limit business opportunities in the sector. European MiCA legislation in its current form favours commercial banks as future issuers of Euro stablecoins, hurting innovation in the European Union."
How can I redeem my EEUR stablecoins?
e-Money have outlined two recommended options for redeeming EEUR as follows:
- For smaller amounts: use the existing EEUR liquidity available on Osmosis where you can instantly swap EEUR for other crypto assets such as OSMO, ATOM or USDC.
- For larger amounts (100k+): EEUR can be redeemed directly for EUR with e-Money A/S. This requires KYC/AML and you should expect around 5 business days for processing. You can contact firstname.lastname@example.org to redeem using this option.
Things to Note
- The firm outlined that EEUR markets on Osmosis will continue to operate during the redemption period.
- They recommend selling in smaller batches to reduce market impact and slippage, advising that their "market making activities will continue to ensure that markets trade near the reference price".
- Be wary of scammers as they may try to take advantage of the unwinding and follow official redemption guidelines as outlined above.
Future of e-Money
The company will continue to operate and the codebase will be made available under under a permissive open source license. The chain (secured by the NGM token), will continue to service the Cosmos ecosystem, and a chain upgrade is planned for this quarter to integrate the latest SDK features and enable governance.
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Disclaimer: none of the information given in this article is financial or investment advice. Please DYOR and assess your own risk.