NEW YORK (AP) — Cryptocurrency company Circle said Thursday that it will start issuing its first euro-denominated cryptocurrency, a stablecoin known as Euro Coin, later this month.

It would be the first stablecoin in euros — the world’s second-most-important reserve currency after the U.S. dollar — backed by a large player in the industry and could potentially become a major conduit for moving cryptocurrencies throughout Europe.

The stablecoin, meaning it’s backed by hard assets, is launching at a time of major declines in the value of cryptocurrencies like bitcoin, which has led crypto firms to fail and erase billions of dollars of digital wealth. That has led to calls for government regulation, which the European Union is getting close to approving.

Circle owns and operates USD Coin, the second-most-popular stablecoin in the industry, with more than $54 billion sitting in that coin. The most popular is Tether, which has a market capitalization over $70 billion.

Stablecoins have become an increasingly important part of the cryptocurrency market, acting as a bridge between traditional financial services like banks and those who want to invest or lend in bitcoin or ethereum. They are typically backed by hard assets, like cash, gold or safe government bonds and are typically priced as one coin for one unit of a particular type of currency.

USDC is backed 1-for-1 by cash and short-term Treasurys. The new Euro Coin will be backed entirely by euros held in euro-denominated bank accounts, Circle said.

The company is launching Euro Coin amid turmoil for cryptocurrencies. The third-largest stablecoin, Terra, collapsed in May in a matter of days. Terra was not backed by hard assets, like Tether or USDC are, and instead relied on an algorithm to keep its $1 value in check.

The firm Celsius, with more than $10 billion in deposits, effectively failed this week, and customer deposits have been locked up in the company’s accounts with no timetable on when, or if, customers will get their funds back.

Circle’s USDC has been a popular place for cryptocurrency investors to move their investments during the turmoil. The total number of USDC in circulation has increased from $49 billion at the beginning of May to more than $54 billion as of this week, according to Coinmarketcap.com. In the same time, Tether’s circulation has declined from $83 billion to roughly $71.5 billion.

“This is actually, in some ways, it’s a great time to be launching products,” Jeremy Allaire, the CEO and co-founder of Circle, said in an interview. “The market turmoil has been a really positive catalyst for USDC. It has been the flight to safety for crypto.”

Circle’s Euro Coin will be tradeable on some of major crypto exchanges, including Binance, starting on June 30.

The European Union has been working on regulations for cryptocurrencies and other crypto assets like stablecoins.

The bloc’s commissioner for financial services and stability, Mairead McGuinness, said Wednesday that the Terra crash and Celsius’ problems highlighted the need for crypto rules.

They’re also necessary to help enforce Western sanctions on Russia amid worries that cryptocurrencies could be used to evade them, she said.

The EU rules “will be the right tool to address the concerns on consumer protection, market integrity and financial stability,” she said.

The regulations include measures to tackle market manipulation and prevent money laundering, terrorist financing and other criminal activities. They also contain requirements to clearly spell out the risks and costs for consumers.

EU lawmakers have drafted proposed legislation that needs agreement from the bloc’s Parliament and 27 member countries, which is expected soon.

___

AP Business Writer Kelvin Chan in London contributed to this report.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.