The largest stablecoin in the euro is the “gateway to the crypto market” for inexperienced investors

STASIS is a company in the cryptocurrency industry that issues its own stablecoin: the EURS. Unlike Tether, the stablecoin with the highest market value, EURS is not pegged to the dollar, but to the euro. The difference in trading volume with Tether is huge: about $97 billion worth of Tether was traded in the last 24 hours alone; in EURS this is 5 million euros. But STASIS CEO Gregory Klumov also sees opportunities for his company “because the dollar will lose its dominance in the future” and “we will see increasing use of alternatives to the dollar in the coming years.” AM Business had a conversation with the director of fintech.

Can you tell our readers a bit more about your stablecoin?

Gregory Klumov: “Yes. It is currently the largest non-dollar pegged stablecoin on the distributed ledger. The coin works on several blockchains at the moment, not only Ethereum, but also Algorand and various layer 2 solutions. EURS is the gateway to the crypto market for inexperienced investors. You can easily jump in and buy a few stablecoins for the same dollar amount, then access the DeFi markets. You can access Bitcoin, Ethereum, or other stablecoin markets. The opposite is also possible. Additionally, we are currently servicing several DeFi founders with their shares.”

“And, as you know, many institutions are allocating capital to digital assets. To some extent, we act as a bridge between these liquid alternatives, digital assets, and traditional capital markets.”

How important is your company’s role in Europe’s burgeoning DeFi sector?

Klumov: “Very big. We started growing when the DeFi market started to recover last summer and we continue to attract clients from that sector on a daily basis. We have DeFi founders or people working on DeFi projects; in their books, they use the euro as currency. So they have EURS. They use our stablecoin as a natural fit to monetize their profits or simply keep some of their assets safe in a low volatility asset. Also in terms of anti-money laundering and KYC legislation, our stablecoin is interesting: we can take the source of your funds and prove to the financial market system that legitimate capital is entering the DeFi market.”

I know that Tether is a problem in the United States because the regulators are not really sure that their dollar reserves are as big as they claim. What about regulators in Europe?

Klumov: “From day one, we have been controlled by a Big Four firm (Deloitte, Ernst & Young, KPMG and PwC). They have access to all our accounts and can track in real time how many assets we have compared to the number of stablecoins issued on different blockchains. And that has been my priority since day one, to provide maximum transparency to the community. Whatever regulations come in the future, we will comply with them. Until now we operate in a self-regulated environment and our clients, our banking partners, our lawyers and directors are satisfied. At the moment we have no problems with the way we have structured ourselves, but whatever regulations come, we will comply with them.”

Malta, Kazakhstan… Europe

STASIS is a company located in the Eurozone; since 2018 he resides on the “blockchain island” of Malta. The Muscat government, which marketed the Mediterranean mini-state as blockchain-friendly, has been toppled for a while. The severity of the scandals that necessitated that downfall gives the entire blockchain campaign a sour aftertaste. Still satisfied with your choice of Malta?

Klumov: “Yes, we are. First of all, our expectations were very high and the legal framework for digital assets sounded really promising. The government was very receptive to our comments. But in the end it’s not about local law, it’s about national law and a regulatory framework imposed on smaller countries regardless of what they choose to implement locally. It is the banking system that holds the key to global financial markets.”

“The Maltese Law of virtual financial assets well it has arrived, but it’s a bit irrelevant in the current climate. Because it doesn’t matter if you have this qualification or not; you still have to negotiate your banking relationships separately and it doesn’t help at all to be a classified company or not. Expectations were high in that scenario, but the result is somewhat disappointing.”

“The rest is very promising. Malta is part of the European Union and we operate the stable currency backed by the euro. So we have the ability to transact with European customers. Also, as a jurisdiction, Malta has historically been very good for asset managers and companies with long-term assets. Many German, Danish and Dutch pension fund companies are based in Malta for the same reason: the ability to hold long-term profitable assets.”

“But we are not alone in Malta. We have an office in Riga, Latvia. We have some partners in Austria, Vienna. We have a development team in the CIS countries; Kazakhstan and Russia. So we are all over Europe”.

Speaking of Kazakhstan: It was once going to provide that country’s Central Bank Digital Currency (CBDC). Is that project still going?

Klumov: “No. That was discontinued in 2018, when we arrived in Malta.”

The reason CBDCs will fail en masse

The STASIS project thus became a stable coin. Between CBDC and Stablecoins: Which do you think has the most interesting future? Obviously you are going to say stablecoins, but is the CBDC phenomenon a threat to the world of cryptocurrencies or do you not see it that way?

Klumov: “I don’t think so, because it is inevitable that there will be a property limit. Otherwise, it will not pose a threat to the stablecoin market, but to the commercial bank deposit market. The way commercial banks operate, they raise capital in the form of deposits and checking accounts. The way they compete is that they try to reduce their credit risk in the eyes of the consumer. So they accumulate capital, make a profit and do everything they can to convince the consumer that they have the image of a stable institution. If the bank fails in Europe, you only have 100,000 euros in credit from an insurance fund. That means that everything over 100,000 euros is at risk if you keep it in one of these institutions. Most importantly, can you be compensated for taking that risk? The problem with a negative interest rate environment is that no one is compensated for the risk of putting money into the commercial banking system.

“In such an environment, if you introduce a risk-free instrument like a CBDC, you will lose all commercial bank deposits overnight. Because it just doesn’t make sense to keep the money in the commercial bank at a negative or zero interest rate and not be compensated for this risk. If you have an alternative, you can store it at the central bank on the same terms and without any risk. So this is why CBDCs will fail en masse.”

Increased share of the euro in international payments

Wouldn’t a stablecoin that tracks the dollar rate have been a better idea for your company?

Klumov: “As you can see, dollar stablecoins dominate the market. I still think we will see increasing use of dollar stablecoins in the coming years. But: you have to understand that there is also a big macro trend. The United States has a significant budget and current account deficit, which will inevitably be financed by dollar inflation and dollar creation. I expect there will be a shift to alternative currencies as a means of settlement in the next decade. It’s already happening…”

Do you mean as a means of payment for contracts?

Klumov: “Yes, for everything. So if you want to make a lump sum payment for goods, services or anything else in the world, people prefer the euro to the dollar, and that trend has accelerated in the last five years. Since then, not only has American micropolitics deteriorated, but also the supervision of correspondent banks that hold and transact in dollars.”

“You can pay in euros and be sure that your counterpart only trusts what you have provided. This is already noticeable in international payment transactions. In the early 2000s, the global share of dollar payments was nearly 40 percent. Now it is around 30. But more importantly, the euro’s share of payments has risen from around 15 percent to more than 25 percent. I think that trend will inevitably continue with digital assets, where people will be more likely to use the euro as a settlement currency.”

Finally, how do you see the future of your company?

Klumov: “We will continue to implement our strategy to produce the most transparent digital assets on the market and build the multi-blockchain stablecoin project. We will release a major software update next month, an infrastructure protocol related to Web 3.0. I am quite proud of where we are now, the team I have created and the prospects of this market because it is the infrastructure protocol for the future growth of the company”.

STASIS CEO TED Talk — source: YouTube


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