This sounds really interesting, I was talking about the need to have something like this in the Stellar ecosystem. One of the questions I have is how do settlement work?
What I mean by that is that the vEUR could be emitted from different institutions and I assume it can be used as a payment instrument by anyone holding it. So, let's say I deposit my EUR in institution A, then pay someone else with the vEUR and now that person goes and redeems those vEUR for EUR in institution B. As long as the movement between institutions is symmetric things are ok, but if it is unbalanced you will have to move funds among those institutions.