For some time now, I’ve been thinking about this, and I’ve decided to share it with you today to hear your opinions. If this topic has already been raised somewhere, I’d appreciate a link to it, but if not, I invite you to join the discussion.
I have the impression that Polkadot, despite building fantastic infrastructure, is usually 2-3 steps behind the market when it comes to implementing the latest trends and exploring niches. Hence my suggestion that we should consider onboarding EURC as soon as possible.
Why?
It will be difficult for us to compete in terms of market share and liquidity for USD stablecoins with the leading protocols. In the case of EURC, there was a great opportunity last year to become a leading protocol—since August, its market cap has been growing dynamically, but even a range of 5-10 million would position us as a significant player and strengthen our standing (ca. 106m total market as of today across Ethereum, Solana, Base, Avalanche and Stellar).
The main advantages I see:
Leveraging the strong foundations we have in Europe
A natural pair with high volume potential (EUR/USD)
Treasury diversification (Euro-denominated expenses could be funded directly, though imo initially the primary goal should be to build reserves and provide liquidity on which the treasury could additionally earn)
A key factor in convincing the largest exchanges operating in Europe to integrate Asset Hub
I don’t want to ramble on too long because I think the advantages of this solution are natural and obvious. I’ll just add that if a significant CHF stablecoin emerges, we should try to be among the first and leading protocols this time.
I’d love to hear your thoughts—maybe there’s something I’m overlooking. Thanks!
EUR stables are a bit complex due to MiCA’s role in the union at this moment. Despite others like EURA having a good structure, it’s an agreement that EURC seems like the obvious choice for institutional adoption in the region given that it’s the only one to comply with their rules.
On-chain activity even to this day follows incentives, either as native yield due to heavy use (lending base rate, DEX fees, etc) or external incentives that come from the protocols like DEXes (Curve), accumulators (Convex), airdrops (Harvest), issuers (Angle) so these incentive plans are better delegated to the DeFi protocols, issuers and rails as they are the ones more incentivized to do it.
With that being said, it seems like it’s more of a long road with the inclusion of the issuer (Circle) starting with the issuance of EURC on AssetHub alongside with a business plan to make use of those issued tokens with a high volume to make sense of such endeavor. The high volume requirement is one of high importance though and requires deep liquidity partners in advance.
Just a long ramble too, it’s just we did our LP and played with EUR synthetics back in the day and they were promising, same for CHF and other heavily used currencies.
This is exactly why I believe it should be part of a larger plan rather than just implementing it and seeing what happens next. Since we know that we have and will continue to have expenses in the Eurozone, we could allocate part of the DCA to the Euro, while also considering campaigns to encourage initial participation, thereby ensuring initial liquidity and sufficiently high volumes. In addition to that, of course, integration with CEXs, and here it seems to me that it might be easier to promote EURC, which doesn’t have so many available networks, than another USD stablecoin.
