[EURS] - Stasis Euro stablecoin

Hello again, MakerDAO community!

Thanks to everyone who managed to take part in our Live AMA with Greg. We received a lot of questions and will reward those who asked the best ones.

For those who missed the event: please check out the recording on our Youtube Channel!

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Hello world!

The voting for EURS is about to end in less than one day. Therefore, we want to thank our global community for great support - more than 30 voted for Yes (Greenlight) with 96,59% rate in our favor. EURS time has come!

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Hi Stasis Team,

Thanks for submitting the MIP-6 collateral onboarding application. My questions are a bit late to the game, but I was hoping you all could answer the following for the DAO’s benefit:

  • STSS Limited is the entity that controls the EXT bank accounts that custody the EUR assets, correct? Or is that the Stasis Foundation?

  • Is STSS Limited or the Statis Foundation regulated as an Authorized Payment Institution in any European country? If so, does STSS Limited or the Stasis Foundation have passporting rights across the EU?

  • Is STSS Limited or the Stasis Foundation registered with the European Banking Authority to provide payment or e-money services?

    • If not, can you explain why?
  • Does STSS Limited or the Stasis Foundation operate a KYC/AML compliance program for all liquidity providers purchasing EURS from or exchanging EURS with the STSS Limited?

  • If neither entity performs exchange services, can you please describe the relationship, if any, with XMT Gozo Ltd? I believe I read that XMT Gozo Ltd. also provides exchange services for EURS?

  • If XMT Gozo Ltd. provides exchange services, can please clarify whether it is regulated as an Authorized Payment Institution in any European country and, if so, whether it passporting rights across the EU?

  • If XMT Gozo Ltd. provides exchange services, does it operate a KYC/AML compliance program?

  • Can you disclose the beneficial owners or controlling persons of the Statis Foundation (the entity that controls STSS Limited, as described in an earlier thread: [EURS] - Adding crypto Euro to MCD)?

  • In your economic model, are “liquidity providers” the only entities able to directly exchange EURS with STSS Limited, the Stasis Foundation or XMT Gozo Ltd.?

Thanks, and we look forward to hearing your team’s responses.

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Hi. Certainly, that’s not a problem, please see your questions answered below:

STSS Limited is the entity that controls the EXT bank accounts that custody the EUR assets, correct? Or is that the Stasis Foundation?

STSS Limited controls only our IP and Wallet development. The entity that holds EURS reserves is a specially designated for the stablecoin reserve holding purpose only and is called STSS (Malta) Ltd. It’s established in the EU, audited by BDO, and is compliant with the MFSA out of Malta and their Virtual Financial Assets Act from 2017. Both entities belong to the Stasis Foundation.

Is STSS Limited or the Statis Foundation regulated as an Authorized Payment Institution in any European country? If so, does STSS Limited or the Stasis Foundation have passporting rights across the EU?

No and no - they are not required to do so currently as they are not involved in either the stablecoin issuance or trading. No licensing exists presently for a stablecoin issuer, but we do self regulate our SPV to the highest standards similar to category 2 licensed investment companies that qualify as MiFID firms.

Is STSS Limited or the Stasis Foundation registered with the European Banking Authority to provide payment or e-money services? If not, can you explain why?

Neither entity you mentioned is involved in the stablecoin issuance or trading. The SPV entity is compliant with the VFA Act in Malta and serves as a safeguard of reserves.

We chose the most efficient way to facilitate secondary market transactions - by creating a competition among partners who hold licenses themselves and offer the most convenient terms for customers to transact. We call this fungible settlement infrastructure and there are currently multiple licensed endpoints available, for example, XMT Gozo Ltd., UAB NexPay, Nortide Capital AG, SCB AG, and others.

Does STSS Limited or the Stasis Foundation operate a KYC/AML compliance program for all liquidity providers purchasing EURS from or exchanging EURS with the STSS Limited?

The SPV entity conducts KYC/AML on all transactions it facilitates although it is only used to face accredited investors buying or selling significant amounts of EURS (5mm+). Everything below is facilitated by the liquidity providers mentioned above as well as our “Sellback” interface which is accessible both through web and mobile here: www.stasis.net/sellback

and is also available via OpenAPI: https://stasis.net/sellback/api/v2/docs/swagger.

Currently, it has no KYC requirements for transactions below 250 euro lifetime, but we are working to increase that limit to 1000 euro per customer in August.

If neither entity performs exchange services, can you please describe the relationship, if any, with XMT Gozo Ltd? I believe I read that XMT Gozo Ltd. also provides exchange services for EURS?

Please see the above.

If XMT Gozo Ltd. provides exchange services, can please clarify whether it is regulated as an Authorized Payment Institution in any European country and, if so, whether it passporting rights across the EU?

XMT Gozo is authorized by MFSA to operate under the Vfa class 4 license.

If XMT Gozo Ltd. provides exchange services, does it operate a KYC/AML compliance program?

Yes.

Can you disclose the beneficial owners or controlling persons of the Statis Foundation (the entity that controls STSS Limited, as described in an earlier thread: [EURS] - Adding crypto Euro to MCD)?

There are no beneficial owners, but a board of directors constitution of which we are happy to disclose to our verified clients. Our project is literally a charity to the industry to create a clean, transparent, institutional-grade quality cash-on-chain, financed by the gains our stakeholders made by investing in Bitcoin back in 2013. CEO of STASIS is one of the directors on the board of the foundation. We welcome other industry veterans to join the board.

In your economic model, are “liquidity providers” the only entities able to directly exchange EURS with STSS Limited, the Stasis Foundation, or XMT Gozo Ltd.?

Anybody who can be qualified as an accredited investor by MiFID terms or an entity, licensed to hold customer’s funds is able to face our SPV to directly exchange EURS. But so far competition among liquidity providers made the terms for retail customers probably the most attractive on the on/off ramp market: it is free for SEPA transfers to purchase, just 0.1% with 50 Eur cap to sell and using Visa/MC 1.5% for EU-issued cards and 3.5% for the rest.

We hope this info helps to clarify any doubts. Let us know if you have any more questions, please.

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Hello, MakerDao community! Since the voting process is over now with a total advantage in our favor, the STASIS team is excited to know - what’s next? Are there any further steps we must take to reach our goal?

We need to wait for the domain teams

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Hi, MakerDAO community! We’d like to hear on the current progress.

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Hello everyone,

Here you can see STASIS statements on Euro reserves

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Hi @Sandu_Gisca and welcome to the community.

Nice to see this verified by BDO. They are a surprisingly crypto-friendly (although expensive) big-league accounting firm.
Question: are there any direct links between your banks where EUR is held and BDO? Or is BDO here simply referring to bank statements supplied by Stasis to BDO?
Sorry to sound a bit paranoid here but I am interested in the information flow.

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Why do the verified statements end in June?

Just to add some updates (being in the eurozone, I follow the project).

There is now a good liquidity on Uniswap. Most of the money is from Stasis I think. The tracking error is quite good those days. Most convenient compared to July.

The amount of EURS in circulation is still small (32M€), the vast majority being owned by Stasis or related parties but the number of holders is increasing.

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Hello @Planet_X,

Thank you for your question!

BDO has direct access to all our custodians to verify fiat assets if such an inquiry occurs.

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Hello @ejbarraza,

Thank you for your question!

Our company can provide verifications on a daily basis if necessary, but currently run quarterly verifications along with daily statements. Once EURS velocity on the primary market increases, we would consider moving back to monthly and/or weekly verifications.

STASIS holds no EURS itself and does not engage in any secondary market trading. Such an approach has been chosen due to the design of self-regulation, to segregate activities with hidden incentives (similar to investment banking and trading). While we are not required by the law to do so, our team anticipates the community to respect this self-proclaimed dedication to transparency and independence as a stablecoin issuer.

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Hello,

Fact: I also live in the EU and therefore I am interested on the topic.

Disclaimer: I am not a competent person in terms of risk analysis and legal frameworks.

As a MKR holder, I don’t feel particularly comfortable (and I think this feeling is widespread) with centralised stablecoins.

Sure, EURS claims to be audited and documents are directly available online. But still, it is regulated in MALTA and so there is a level of uncertainty.

For example, @Gregory_Klumov mentioned

and there you go: "The European Commission launched infringements procedures Tuesday against Cyprus and Malta over their “golden passport” programs, (source: https://abcnews.go.com/International/wireStory/eu-takes-action-malta-cyprus-golden-passports-73711080)

But beside these legal aspects,

My main question (to anyone reading) is: why would MakerDAO want to embark another centralised stablecoin which:

  1. has much lower market cap than others we already have.
  2. EURS marketcap has been stuck at ~35m EUR since july 2020, so it has not seen any growth. By contrast USDT, USDC, DAI, and other stablecoins have all seen a growth of 200/300% or more.

Also, but this is just me, I don’t particularly like statements like:

The best user experience claim… meh, whatever…

The cheapest on and off ramps out/to of EUR, I don’t think so.

For just one example I have used in the past Lykke.com (Switzerland based) and it currently has no trading fees and 0% fees on EUR wire transfers (source: https://www.lykke.com/wallet-fees-and-limits/).

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@iammeeoh,

I am based in Europe and getting anything crypto properly set up both legislatively and with regards to banking can be next to impossible.

So +1 to Stasis for getting this rolling no matter what.

With regards to Stasis risk the statement

will need to be doublechecked with BDO. As long as the collateral is real I am OK with almost anything. It is better than Tether.

Malta dodgy? Yes. But at least they are willing to do business. Golden passports? That has been going on for years and as far as I know it is possible to purchase both UK and US citizenships so I would not worry too much about that. If you are a plus size investor from a shitty country some EU passports are literally a golden chance to secure your wife and kids an exit opportunity in case of “issues”. I would do the same.

well I guess that depends on where you are based. If you live in Ukraine then Lykke might not be available.

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Absolutely.

But, here we are discussing the benefits and the risks of adding EURS to the collateral lists, not about the difficulties in the Euro Zone.

So +1, +2, +3, kudos, bravo, congrats to Stasis. Sure.

But, again, why should add a ~35m cap centralised (in Malta) stablecoin without much growth in the last few months (possibly carrying some risk)?

I would also do the same. But I just don’t see how this has anything to do with the discussion.

My link just pointed out that: the European Commission launched infringements procedures against one of the core business mentioned by @Gregory_Klumov.

I have no moral judgment of any sort on ‘golden passports’.

Again, I don’t get this comment.

My point was not that Lykke is better than Stasis (I do not hold this opinion btw). I simply wanted to point out a self-assessment (‘we are the best’) made by Stasis, which I do not find very interesting/useful for the discussion in this thread.

We see no trouble setting Malta as a launchpad for EURS. The STASIS team has been at the forefront of stablecoin operations and the EU zone’s regulatory landscape, developing the EURS cryptocurrency with a strong focus on regulations since day one. So we have been successfully operating in a self-regulated form for more than three years. STASIS EURS currently stands as the largest non-USD stablecoin on the market, being the only big four-audited issuer and providing substantial transparency of our operations.

It’s worth noting that since 2017, more than 200 teams worldwide have announced stablecoin developments, but very few projects managed to deliver a working product. STASIS EURS currently stands as the largest non-USD stablecoin on the market, being the only big four-audited issuer and providing ultimate transparency of our operations.

It’s well known that people have a strong preference for a unit of account correlated with balance sheet currency. Most of the existing customers are EU consumers eager to experiment with well-known assets like Bitcoin or Ethereum and decide to start with euro stablecoin as it’s free of the burden of harsh volatility.

The global crypto community still continue to count their wealth in dollars, so it’s not a surprise that USD-backed stablecoins experience tremendous increase alongside the stablecoin market growth. Our efforts are directed towards changing this mentality.

Because EURS is one of the most transparent solutions in the stablecoin market segment due to audits and reserve transparency outlined about - qualities that many projects fail to deliver. Meanwhile, the high speed of asset growth can’t be considered as a non-risk mark.

Besides, when it comes to growth, it’s worth noting the demand for yield on EURS since our stablecoin holders accumulated enough tokens to represent the top 10 pool by liquidity in DeFi space - Uniswap:

EURS stablecoin is being regarded as a reliable instrument for long-term holding to shield from traditional crypto market disasters. Currently, observed volatility works as a conviction for investors to stick to the stablecoin field and their balance sheet currency.

Speaking of transparency & growth, it’s worth to remember the infamous story of GUSD, where certain actions taken by Gemini to boost GUSD adoption have had unintended impacts in practice. In a bid to capture market share, Gemini issued roughly 1 percent discounts on GUSD in 2018 to OTC desks and market makers, who were then made to agree on restrictions that would bar them from immediately redeeming the assets.

According to the trader based in Latin America, Gemini pitched the company on a discount deal that offered his firm the ability to buy tokens at below market value. (The company declined because the desk wanted to obtain GUSD so that it could be transferred to fiat.) When the desk later acquired GUSD from its own network, the trader said he was warned by Gemini staff that redeeming millions of dollars would harm the stablecoin.

More story here: