As set forth in a Medium post dated January 9, 2023, Cosmos stablecoin project e-Money (a Danish Fintech company and blockchain-based payment platform) will cease issuing its stablecoin, EEUR. Pursuant to the terms and conditions as posted, the issuance stop is effective January 9, 2023 and e-Money will support redemption of the coin until March 6, 2023. After March 6, 2023, any further redemption will be dealt with on a case by case basis.
e-Money was founded in 2017. Working closely with the Financial Services Authority and Ernst & Young, e-Money was able to develop a compliant stablecoin able to survive in the negative interest rate environment present within the European markets. The EEUR stablecoin was initially issued by e-Money in 2020, at first utilizing Ethereum bridging technology but later adopting Cosmos Inter-Blockchain Communication protocol.
It was the hope of the e-Money team to continue the coins success in 2022, but the overall cryptocurrency industry did not cooperate. In fact:
the crypto industry faced many challenges in 2022, with both centralized and decentralized entities experiencing difficulties. While e-Money was not directly affected, the stablecoin business relies heavily on integration with traditional finance, and financial institutions’ interest in cryptocurrency has waned following the events of 2022. As a result, the tumultuous events of 2022 have made it challenging for e-Money to integrate with traditional finance.
[e-Money. Executive Summary: e-Money A/S has decided to cease issuance of its EUR backed stablecoin (EEUR). (Accessed January 11, 2023)].
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As of a somewhat more specific explanation of its action, e-Money in its announcement set forth:
[T]he 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. As a result, the e-Money team has decided to unwind the issuance of EEUR.
[e-Money, supra].
e-Money has recommended two options for the redemption of EEUR coins, to wit:
For holders of less than 100,000 coins: e-Money has recommended the use of the liquidity available on the Osmosis platform where holders can instantly swap their EEUR for other crypto assets supported by Cosmos; or
For holders of more than 100,000 coins: EEUR may be directly redeemed for EUROS using e-Money A/S. Utilization of this option requires both KYC and AML so accordingly the redemption processing should take around five business days for completion. Holders wishing to use this option should contact the company at [email protected].
e-Money warns that scammers might attempt to take advantage of the unwinding process. They remind holders to be wary of redemption methods that may deviate from those two set forth above. e-Money advises that the Osmosis markets for EEUR will remain in operation throughout the scheduled redemption period. And finally, e-Money recommends that holders sell their coins in small batches so as to minimize market impact and slippage, but nonetheless, the company will continue its market making operations to maintain the EEUR market trading near its reference price.
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