Regulated Euro Launched on Algorand
Last Updated: November 17, 2023
In a groundbreaking development within the financial technology sector, Quantoz Payments has achieved a significant milestone by securing licensing as an electronic money institution under the Dutch Central Bank's supervision. This pivotal move enables the issuance of the first regulated and programmable euro legal tender, EURD, on the Algorand blockchain.
The EURD holds immense promise as it is slated to become available to businesses and consumers across the European Economic Area, ushering in a new era of financial accessibility irrespective of traditional banking affiliations. Beyond conventional boundaries, EURD will revolutionize transactions by facilitating payments to internet-connected devices and avatars, playing a fundamental role in shaping the Web3 economy. It empowers microtransactions, making scenarios like compensating sensors for data and machine-to-machine transactions economically feasible.
Reasons For Chosing Algorand
More than a mere digital euro, EURD offers a suite of innovative features such as robust privacy measures, coverage for transaction fees, and the ability to program money for enhanced efficiency and cost-effectiveness.
Gaston Hendriks, Quantoz co-founder and CTO, expressed excitement about the technical prowess of Algorand, affirming their capacity to process thousands of transactions per second with instant finality. He highlighted the user-friendly nature of integrating EURD into applications, underscoring the simplicity even for developers with limited blockchain knowledge.
Eric Wragge, global head of business development at the Algorand Foundation, commended Quantoz for this significant achievement and emphasized the foundation's commitment to collaborating on use-case development and product rollout.
Why This is Important
Importantly, EURD distinguishes itself from cryptocurrencies, stablecoins, and central bank digital currencies. It falls under the category of an electronic money token (EMT), designed to comply fully with the Markets in Crypto Assets Regulation (MiCAR), which governs the issuance of electronic money tokens on distributed ledgers.
Furthermore, Quantoz isn't just a pop-up blockchain shop trying to make headlines. The company established already in 2015 and headquartered in Utrecht, the Netherlands, where they specialize in blockchain-based solutions. Quantoz Payments, a wholly-owned subsidiary, acts as the issuer of EURD, emphasizing their commitment to pioneering advancements in the fintech landscape.
EURS vs EURD: Differences
On november 16th, Algorand largest DeFi platform, Folks Finance, announced that they were listing the STASIS euro (EURS), which is the largest euro stablecoin, operated independently by a european fintech company. This is not to be confused with the aforementioned EURD, which is not a cryptocurrency or a stablecoin, but an electronic money token (EMT) that is also distinct from central bank digital currencies (CBDCs). In order for the EURD to launch on Algorand, Quantoz had to obtain an Electronic Money Institution (EMI) license from the Dutch Central Bank - a process that is much more highly regulated.
The EMI licence is a financial licence that enables companies to issue electronic money in the European Economic Area. With an EMI licence, a company can issue payment instruments such as e-money, prepaid cards and mobile payments. An EMI licence is issued by a country’s central bank that allows the holder of the licence to perform a range of such functions.
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