Deutsche Bank and Partners to Launch Euro Stablecoin
Deutsche Bank’s DWS Group, along with Flow Traders and Galaxy Digital, will establish a company called AllUnity to issue a euro-denominated stablecoin. The initiative, led by former BitMEX CEO Alexander Höptner, will be based in Frankfurt and aims to obtain an e-money license from Germany’s financial regulator. The fully collateralized stablecoin is expected to launch within 18 months. The consortium plans to cater to institutions, corporates, and private users by leveraging their collective influence in both traditional and crypto markets.
Tapping into the Stablecoin Market
DWS oversees assets totaling €860 billion, Flow Traders handled €2.8 trillion worth of assets in H1 2023, and Galaxy Digital offers diverse crypto services. According to Höptner, the partnership combines the trustworthiness of a major asset manager, a successful market maker, and a leading innovator in the crypto sector. This collaboration reflects the growing trend of major companies entering the stablecoin market, particularly focusing on euro-denominated tokens.
Challenges for Euro Stablecoins
The stablecoin market is valued at around $130 billion, but euro stablecoins have faced limited demand compared to USD-denominated coins. Euro stablecoins have averaged monthly trading volumes of $90 million, significantly lower than the $600 billion monthly average for USD-denominated coins.
Hot Take: Deutsche Bank Enters the Stablecoin Space
Deutsche Bank’s DWS Group joining forces with Flow Traders and Galaxy Digital to launch a euro stablecoin demonstrates the increasing interest in stablecoins and the potential of euro-denominated tokens. This collaboration brings together established players in both traditional finance and the crypto industry to create a stablecoin that caters to institutions, corporates, and private users. As major companies continue to enter the stablecoin market, we can expect further innovation and competition in the space. However, euro stablecoins still face challenges in terms of demand and trading volumes compared to USD-denominated coins.
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