Aave Launches EURC Stablecoin on Base for Collateral in Lending and Borrowing

Aave has launched the EURC stablecoin on the Base Layer 2 blockchain, a significant step forward in its decentralized lending and borrowing services. EURC, issued by Circle, is MiCA-compliant and can now be used as collateral for lending and borrowing activities on the Aave platform. Users can either borrow EURC directly or use it as collateral to secure loans in other assets. This marks a key expansion for Aave’s offerings, giving users more flexibility by incorporating a Euro-pegged stablecoin alongside its existing USD-pegged stablecoins such as USDC, Dai, and Tether.

This launch reflects a broader trend within the DeFi space, where platforms are moving beyond USD-backed stablecoins to include more diverse options, like EURC. The integration of EURC also aligns with regulatory shifts, particularly the MiCA (Markets in Crypto Assets) regulation, which aims to ensure stability and transparency in the European crypto market. As part of this trend, other DeFi protocols like Fluid and Moonwell have already added EURC markets to Base.

The MiCA regulation, which came into effect recently, mandates strict compliance for stablecoins operating within the European Union, including regular audits and full reserve backing. Circle, the issuer of both EURC and USDC, became the first stablecoin issuer to be licensed under MiCA in July 2024. This compliance guarantees that EURC, as well as other MiCA-compliant stablecoins, are securely managed and can be redeemed 1:1 for fiat currency, offering users a stable and legally recognized alternative to USD-backed stablecoins.

With this move, Aave not only broadens its stablecoin offerings but also positions itself as a leader in the evolving European crypto regulatory landscape.