Financial news

Membrane Finance launches EUROe, an EU-regulated crypto stablecoin designed to help businesses, individuals and foundations access cheaper, faster and more stable digitally-native money.

Finnish fintech company Membrane Finance has issued its EUROe full-reserve stablecoin and payment network.

Pegged one-one against fiat Euro, EUROe is transactable on the Ethereum blockchain. For each EUROe issued, at least one fiat Euro exists in a European financial institution or bank, ring-fenced from Membrane Finance.

Unlike the dramatic highs and lows experienced in the value of other cryptocurrency forms, stablecoins often retain a steady and constant value as they are typically valued against silver, gold or in this case, fiat currency.

Although this reliability does come as a benefit, it is not the sole focus of this issuance.

Redefining cryptocurrency

The global payments industry facilitates around $240trillion of transactions between people, businesses and governments every year. But the infrastructure for money has failed to evolve to meet the modern consumer’s needs – payments take too long to settle, cost too much and require too much human interference.

In light of a solution, EUROe enables payments to be sent around the world transparently and at near-instant speed and at near-zero cost.

As a result, the stablecoin provides individuals, businesses and governments with a way to transact without incurring the risks and complexities of converting and paying in volatile cryptocurrencies.

Juha Viitala, CEO and co-founder of Membrane Finance, describes the launch as “massive news for both us and the wider European cryptocurrency market and community.”

“We want to bring decentralised finance to the masses and make it as easy as possible for Europeans to use a currency they trust and know,” he continues.

“This launch is the result of two years of hard work to build the most robust regulatory-compliant European payment systems that allow you to leverage innovation in decentralised finance and other emerging technologies.”

Regulatory approval

EUROe is one of the first Euro-pegged stablecoins to receive an electronic money institution (EMI) licence from the Finnish Financial Supervisory Authority (FIN-FSA).

In view of the oncoming European MiCA legislation, FIN-FSA’s approval and EMI licence for the stablecoin will ensure its compliance with MiCA, which is forecast to be the strictest regulatory framework for digital assets ever. EUROe eliminates the operational and financial risks stemming from crypto volatility and foreign exchange risks.

“Regulation is key in legitimising and helping to bring crypto and e-money alternatives to broader markets,” Viitala continues.

“There’s nothing more important than trust when it comes to financial systems, but society must move on from its traditional ways and utilise the latest technologies to provide more accessible, stable, and efficient money systems.”

Clear-cut data

Every EUROe transaction happens on-chain through the Ethereum blockchain. This method records each transaction on an immutable ledger and in this way, blockchain is able to provide complete and accurate data on the movement of assets and transactions.

Such insight allows engaging parties to better understand counterparties, their transactions and assets, and its applicability can extend to various instances in finance, including credit provisioning and lending decisions.

“Stablecoins are an essential part of the transition towards blockchain-based money infrastructure, and Europeans deserve to have a full-reserve euro stablecoin from the EU and regulated by an EU-based financial authority,” explains Viitala.

“EUROe hopefully brings more regular people to decentralised finance (DeFi), who were previously unable to or worried about the volatility of cryptocurrencies.”

EUROe smart contracts

With the launch, users can now implement the EUROe stablecoin in smart contracts and transact on Ethereum. Smart contracts are self-executing programmes that automatically execute payments or other actions on the blockchain based on a series of programmed parameters.

Smart contracts can automatically and autonomously source information from many external sources and enforce agreements, making the payment process far leaner and with fewer intermediaries.

For example, a smart contract might trigger an automatic transfer of asset ownership on receipt of payment without the need for intermediaries. Membrane Finance plans to release EUROe smart contracts on an increasing number of blockchains.

The company recently raised €2million in funding from Finnish seed-stage venture capital firm Maki.vc. The company confirms its current work on its tokenisation platform and bridging technology, meaning users will be able to make cross-chain transfers of EUROe without holding the native gas asset.