Membrane Finance, a finnish fintech building a European alternative to the USD stablecoin, has been granted an Electronic Money Licence by the country's regulator and picked up €2 million in seed funding.
With the e-money licence secured, Membrane's product, called EUROe, becomes the first regulated EUR-based, full-reserve stablecoin in the EU.
“We’ve been working towards this very goal for the last 18 months," says Juha Viitala, the CEO and co-founder of Membrane Finance. "Getting an EU-level license and the opportunity to finally build a truly regulated EUR-based stable coin is massive news for both us, and the wider European cryptocurrency market and community."
Set for launch in early 2023, EUROe takes a fiat Euro and transforms it into a 1:1 pegged digital currency that can be used in transactions on all major blockchains.
To create revenue, Membrane Finance invests a certain percentage of the fiat reserve in "low-risk assets".
Says Viitala: “We have a strong protectionistic perspective in building EUROe. An EU version must be introduced to the market to compete globally with other currencies. Keeping euro reserves in the ETA region and preventing reserve cumulation outside the EU is mandatory to keep up with the competition."
The firm expects that the upcoming EU MiCa regulatory regime for crypto assets will ultimately pave the way for broader co-operation with traditional financial institutions.
The €2 million funding round was financed by Finnish seed stage venture capital firm Maki.vc.
Paavo Räisänen, Maki Ventures’ partner and the lead investor for the round, says: "If the recent events in the crypto market have shown us anything, it's that we need trusted systems that bridge the gap between traditional financial markets and crypto ecosystems. Stablecoins are an essential part of the transition towards blockchain-based money infrastructure, and Europeans deserve to have a full-reserve euro stablecoin that is from the EU and regulated by an EU-based financial authority."