The developers behind Celo, a decentralized digital payments protocol, are plotting the launch of a new stablecoin which will be pegged to the euro.
Marek Olszewski, a partner at cLabs — one of the firms leading the development of the protocol — told The Block there had been a “flurry of activity” in the Celo community around launching a euro stablecoin over the past few months.
Testing of the on-chain governance proposals of the stablecoin is ongoing, but Olszewksi expects the token to launch in March.
The Celo platform already underpins a US dollar-pegged stablecoin, launched in the summer of last year, which can be used to make payments over mobile devices.
Today, the Celo Dollar is priced at $0.996650 with a market capitalization of around $28.5m, according to analytics site CoinMarketCap.
As with the planned euro stablecoin, the Celo Dollar is backed by a basket of crypto assets which is algorithmically adjusted to keep the price as close to its pegged currency as possible. In the case of the dollar product, Celo tokens make up 50% of the assets in reserve, which also includes bitcoin and Ethereum, according to Olszewski.
“We did a lot of work to show that having a diverse set of crypto assets is actually really good for stability,” he added. “The community is actually right now having discussions about adding other types of assets.”
A spokesperson for cLabs said the euro stablecoin will remain closely pegged to the euro “by creating an incentive for arbitragers to expand or contract the supply of cEUR to meet demand”.
“This is the same way that cUSD works, which has kept its peg since inception,” the spokesperson said.
A number of big names in the wider crypto industry – including Anchorage, Ramp, Coinbase Ventures, Ledger and Blockchain.com – are committed to building on the Celo protocol.