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Crypto world’s agenda was shaken by a significant development that could increase the market share of stablecoins, which are part of the altcoin class. Bloomberg reported that Deutsche Bank, Germany’s largest bank by market share, is preparing to launch a Euro-indexed stablecoin in partnership with others.
Deutsche Bank’s Euro-Indexed Stablecoin Initiative
According to Bloomberg, Deutsche Bank’s DWS Group, together with the Netherlands-based market maker Flow Traders and the cryptocurrency investment firm Galaxy Digital, is preparing to set up a new company to launch a Euro-indexed stablecoin. The report stated that the initiative aims to facilitate the mainstream adoption of tokenized assets. The planned new company, ‘AllUnity,’ will operate in Frankfurt, Germany, and efforts to obtain regulatory approval for the company are ongoing.
At present, the stablecoin market is dominated by Tether‘s US dollar-indexed USDT (USDT), which has a market value of $90.65 billion. Right behind USDT is Circle’s USD Coin (USDC), which is also pegged to the US dollar.
AllUnity to Be Led by Former BitMex CEO
The name of the Euro-indexed stablecoin that Deutsche Bank and its partners will issue is not yet known. According to Bloomberg’s sources, Deutsche Bank and its partners are preparing to apply for an e-money license from the German Federal Financial Supervisory Authority (BaFin) for AllUnity. Moreover, sources say that AllUnity will be led by Alexander Höptner, who previously served as CEO of the cryptocurrency exchange BitMex.
The report indicated that the stablecoin will be fully backed by collateral. This is an important matter in the stablecoin market due to the lack of clarity regarding the collateral and funds that will support the stablecoin operations, especially since Tether, the company behind USDT, announced plans to minimize credit risk in December 2022 following the bankruptcy of FTX and the ensuing concerns over the safety of stablecoins.
The company emphasized its focus on maintaining transparency, accountability, and operational excellence to protect itself from such disasters. Galaxy Digital, the partner with which Deutsche Bank is working to launch a Euro-backed stablecoin, was also among the companies affected by the collapse of FTX.
