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Published: e-Money’s Proof of Funds Report by Ernst & Young

Dear Community,

Hope you are well and survived the recent crypto crash! Last week was one of the most eventful weeks in the crypto space, unfortunately wiping $500 billion worth off the total cryptocurrency market. It took less than a week for the third largest stablecoin and its ecosystem to become virtually worthless, wiping out countless traders’ savings and vaporising billions in crypto wealth.

In our view algorithmic stablecoins are inherently fragile as they don’t have independent assets in reserves to back the value of their stablecoins. The tension at the heart of this proposition lies in backing the stablecoin in one more volatile asset, and pegging it to another less volatile asset. In order to make this proposition possible, algorithmic stablecoins rely on over-collateralisation to support their peg.

The issues inherent in algorithmic stablecoins also leave them prone to “black swan” events. When the value of an underlying crypto asset falls suddenly as the markets did last week and in March of 2020, the stablecoin becomes under-collateralised. This would lead to vaults being liquidated and a cascade event ensues.

Our stablecoins are fully collateralised, backed with bank deposits and government bonds held at commercial banks. Uniquely, e-Money’s currency-backed stablecoins each utilise an interest bearing peg that tracks the underlying interest rate, meaning that interest on the fiat currency is transmitted to stablecoin holders even when just sitting in a user’s wallet.

Lastly, the fidelity and transparency of e-Money stablecoins will be ensured by E&Y quarterly audits to ensure Proof of Funds. This will give complete peace of mind to all users who utilise the e-Money ecosystem.

About e-Money

e-Money is a blockchain-based payment platform built by Danish fintech e-Money A/S, committed to bringing financial inclusion and helping people around the world to have easy access to digital currencies. Built on Cosmos technology, e-Money supports a range of fiat-stablecoins which are fully backed by bank deposits and government bonds that are also interest bearing. The fidelity and transparency of e-Money stablecoins will be ensured by Ernst & Young providing quarterly Proof of Funds.

e-Money currently supports several European currency-backed stablecoins such as the EEUR, the ECHF, and tokens backed by Scandinavian currencies (ENOK, EDKK, and ESEK). The e-Money ecosystem has a second token, the NGM “Next Generation money” which is a staking token and rewards token. Users can stake NGM to secure the e-Money network.

Unlike most existing stablecoins which aim to maintain a static 1:1 peg with their underlying assets, the value of e-Money’s currency-backed tokens continually shifts in line with the interest accrued on the reserve assets. This means that holders benefit from the interest accrued on their assets while they sit securely in your wallet. The e-Money blockchain supports instant payments at scale and includes a DEX for easy conversion between currencies. e-Money has already integrated with Cosmos Hub, Osmosis, and Ethereum and expects to integrate with all major networks moving forward.



Leading issuer of interest-bearing, currency-backed stablecoins for the Internet of Money.

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