Why European Stablecoins Aren’t As Successful As Tokens Backed By The Dollar
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Stablecoins are an asset of cryptocurrency that are very popular throughout the industry. There are numerous stablecoins backed to the US dollar currently available in the market but there are many different assets under this “stablecoin” moniker that are pegged with other Fiat currencies such as the Euro.
According to the co-founder and head of trading at Woorton, Zahreddine Touag, these other stablecoins are less liquid in comparison to US dollar-based tokens.
Earlier this week during the Paris blockchain week, Touag took to the conference panel and said that “there’s not any euro stablecoin that is very liquid”. He went onto highlight numerous points backing up his argument to say specifically that it is very expensive to do a stablecoin tethered to the euro.
He also said:
“The primary source of revenue for U.S. dollar coins are the interest rates when you replace the U.S. dollar because you have positive interest rates on the U.S. dollar, while in Europe those are negative, or have been negative for a long time.”
The biggest stablecoin in the industry is Tether and despite its controversy, it is the fourth-biggest asset in the market at the time of writing.
The co-founder further went on to discuss how Europe doesn’t have a big enough market share in this area of the market, adding:
“The second reason also is that basically Europe is a very very small actor in this market. Most of the innovation did not come mainly from Europe but we have the big players in the U.S. and in Asia.”