Circle launches euro stablecoin on Stellar- Will this boost XLM?

• Circle has announced the launch of its euro-backed EURC stablecoin on the Stellar network.
• XLM’s demand has cratered in the past few weeks.

Stellar [XLM] has become the third blockchain network to support Circle’s euro-pegged stablecoin EURC, joining Ethereum [ETH] and Avalanche [AVAX].

Hello Europe ? meet our new friend EURC on #Stellar. Same speed, low cost, and reliability of the Stellar network we all know and love in a brand new currency.

With @circle's EURC, we can't wait to see what real-world utility builders unlock next.@TeanaTaylor breaks it… pic.twitter.com/eQE5sMZI2M

— Stellar (@StellarOrg) September 26, 2023

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In a press release published on 26 September, Rachel Mayer, Circle’s VP of product management, noted that the essence of the stablecoin issuer’s alliance with Stellar is to ensure the expansion of the dividends of the blockchain technology to individuals living in regions where financial services are not easily accessible. 

“The bedrock of Circle’s deep alliance with the Stellar Development Foundation is our shared commitment to advancing financial inclusion and offering mobile-first, near-instant, and low-cost payments solutions to people worldwide…Together, we are working to ensure that those affected by humanitarian disasters can securely access aid, even when on the move or when on-the-ground services have been critically impacted.”

According to the statement, Ripio, which recently obtained a license to operate in Spain, is the first company to offer EURC payments, deposits, and withdrawals on the Stellar network.

In the crypto market, the short list of euro-backed stablecoins comprises EURC, EURt, issued by Tether, and EURS, from Malta-based Stasis. 

According to data from CoinMarketCap, EURS is the largest euro-backed stablecoin by market capitalization, followed by EURC and EURt. EURS has a market capitalization of $131.15 million, while EURC and EURt have market capitalizations of $52 million and $38 million, respectively.

XLM and its recent troubles

At press time, XLM exchanged hands at $0.112. The token’s price has steadily declined by 15% since 10 September. This has been due to the low demand for the token, especially amongst spot traders.

Key momentum indicators observed on a daily chart confirmed the depletion in XLM’s accumulation since 10 September. As of this writing, key momentum indicators trended downwards and rested below their respective neutral regions. It meanst that selling pressure outpaced accumulation among XLM’s daily traders.

The token’s Relative Strength Index (RSI) and Money Flow Index (MFI) were 37.66 and 18.39 at press time. 

Moreover, the alt’s price rested on the lower band of the Bollinger Bands indicator, confirming the strength of the selling pressure.

While a price correction typically follows this, the sideways movement of the general market exacerbated by poor sentiment might make it impossible in the short term. 

Source: XLM/USDT on TradingView

How much are 1,10,100 XLMs worth today?

In the derivatives market, there has been a consistent fall in open interest. Data tracked by Coinglass revealed a 33% decrease in XLM’s open interest since 12 September.

This confirms the general lack of interest in holding XLM. Participants in the token’s futures market have increasingly exited their positions in the past few weeks. 

Source: Coinglass