EURST: Use Cases that Bring Value to the Euro Stablecoin
The technology behind cryptocurrencies makes way for innovative use cases, but their inherent price volatility restricts us from harnessing their full potential. Thankfully, we have stablecoins that integrate the short-term stability of fiat currencies with the technology of cryptos. This has resulted in the demand of stablecoins skyrocketing over the last two years, leading the total stablecoin market capitalization to over $126 billion.
However, most major stablecoins today mimic the value of the U.S. dollar and there is abundant room for a euro stablecoin. Filling this gap is the EURstablecoin (EURST). EURST is a euro-compliant stablecoin built on Ethereum’s ERC20 standard that is backed by a U.S. dollar reserve but maintains a price equivalent to one euro and is pegged to USD reserves.
In this article, we will explore the potential use cases of EURST that can redefine global finances.
Real-World Use Cases of EURST
Hedge Against Price Volatility
The European Central Bank (ECB) in a 2019 study found that bitcoin suffered from 69% price volatility. On the contrary, stablecoins had a volatility of around 10%. As a stablecoin, EURST prices don’t fluctuate and are always protected from abrupt crypto market volatility. This is why you can use EURST as a store of value or a safe haven asset for long-term investments. As a self-custodial token, token holders have complete control over their assets.
Cross-border Trading and Payments
Transcontinental trading often involves onramps and offramps that charge significant transaction fees. When traders use stablecoins like EURST for international business payments, they can bypass the transaction fee. This is primarily the reason why payments in stablecoins have jumped significantly when the economy opened up after Covid-induced lockdowns. In Q2 2021, the total stablecoin transaction volume was $1.7 trillion, up by more than 1,000% compared to last year.
Easy Salary Payments
Way back in 2018, the largest shipping and logistics company in Japan, Nippon, considered paying its workers in stablecoins. It was meant for the seafaring workers to send and receive payments across borders. The move demonstrates how EURST can become a payment option for multinational corporations. Employees can either send their salary back home or convert it to a currency of their choice without incurring absurd fees.
Seamless Remittance Solutions
A World Bank study has shown that remittance to low and middle-income countries amounted to $540 billion in 2020. The G7 Working Group had already predicted the importance of stablecoins for remittance payments in a 2019 report. Earning professionals prefer to send money via stablecoins like EURST so that they can cut down on sky-high transfer fees. The absence of intermediary fees and predictable token prices help the families fully utilize their remittance.
Instantaneous and Secure Payment Settlement
Legacy financial systems have to depend on banking hours to finalize and settle transactions. Although most payments have become instantaneous, the final authorized balance update occurs during normal working hours. On the contrary, blockchain-based stablecoins function 24*7 and the transaction history is immutably stored on-chain. The blockchain serves as a settlement layer for instantaneous payment finality.
Facilitating Stable and Automated Escrow Contracts
Escrow holders with significant holdings suffer from enormous losses due to cryptocurrency’s price volatility. However, stablecoin-based escrows provide protection against abnormally volatile prices. The smart contract enabled escrows are also more secure and open to audits from third-party sources.
Yield Generating Capabilities
Legacy financial institutions provide loans with a maximum APY of 2.15%. On the contrary, stablecoin lending may offer double-digit returns that go up as high as 15%. EURST can plug the enormous demand for loans in the market and provide new opportunities for debt investors.
Stabilized DApp Payments
DApps have integrated payment structures that accept only network tokens for their services. However, cryptos are known for fluctuating price points that can lead to lower revenues for the dApps. In order to create a sustainable ecosystem, stablecoin payments become the only viable option for these startups. This helps the dApp companies make predictable profits from their services.
Banking The Unbanked
Around 2 billion people across the globe do not have a bank account. This means that this huge population cannot borrow money or earn interest through institutional channels. EURST can successfully cater to this gigantic chunk of unbanked people without them having to worry about banks anymore. According to the International Monetary Fund (IMF), unstable and inflationary local currencies will give way to stablecoins. It can be safely said that EURST has the potential to eventually offer a better alternative to native currencies in low-income countries.
Now that you know about all the use cases of EURST, what are you waiting for? Get your EURST here and start transacting!