EURT is a EURO-denominated stablecoin issued by Tether.
EURT is backed by the same pool of assets that USDT is. Reserve assets include US Treasury bills, non-US Treasury debt, reverse repos, corporate bonds, secured loans, Bitcoin and miscellaneous investments whose exact nature and liquidity profiles are undisclosed.
In our assessment, there are safer Euro-denominated alternatives to EURT.
EURT's rating can be upgraded from D to C by:
disclosing the names of its banks and custodians OR
lowering the minimum redemption value from $100K to $5K AND
performing a complete financial audit by an independent auditor OR
incorporating transparent and reasonable timelines for redemption in the Terms of Service, similar to conditions imposed by the NYDFS on stablecoin issuers under its authority.
The Stability factor is evaluated on the following:
1. Reserves Management - Quality, quantity, storage and segregation of reserve assets
2. Market Feedback - Indicators of market's confidence in a stablecoin derived from price and trade data
3. Mechanism - Stabilization methods that protect the stablecoin
The Management factor is evaluated on the following:
1. Restrictions - What deterrents exist to prevent key personnel of stablecoin projects from unethical and illegal behavior?
2. Negative Track Record - Have key personnel been involved in scams, frauds or other illegal activities?
This factor aims to assess risks arising from technical implementations – i.e, smart contract code and oracles. It is currently not assessed, but we plan for it to be evaluated in the future.
The Decentralization factor is evaluated on the following:
1. Platform Censorship Risk
2. Custodian Risk
3. Type of Collateral
4. Diversified Voting Power
5. User Censorship Risk
The Governance factor for fiat-backed stablecoins is evaluated on the following:
1. Holder Protection - What rules, statutes or code exist to protect interests of stablecoin holders?
2. Reserves Verification - What checks are done to ensure existence of reserves?
3. Redemptions - Do issuers have transparent and reasonable redemption terms?
This factor seeks to incorporate external feedback mechanisms such as market and social sentiment into our internal ratings. It is currently not assessed, but we plan for it to be evaluated in the future.