DWS, the asset management wing of Deutsche Bank (NASDAQ: DB), has announced the formation of a new venture to roll out a euro-denominated stablecoin to increase its Web3 reach.
To achieve the planned rollout, DWS says it will team up with Galaxy Digital and Flow Traders to set up a financial infrastructure provider dubbed AllUnity. According to the joint statement, AllUnity will be the launch pad for a regulated, fully collateralized EUR-denominated stablecoin.
Parties to the joint venture submit that the proposed launch will bridge traditional finance and decentralized finance (DeFi), introducing a new wave of investors to the on-chain economy. At the core of the offering is the intention to “unlock greater institutional adoption of tokenized assets.”
The parties expressed their belief that AllUnity can achieve its objectives given the considerable experience of members. DWS is expected to bring its wealth of experience in portfolio management and product structuring, joining forces with Galaxy Digital’s extensive blockchain technology expertise.
Galaxy Digital’s subsidiary, GK8, will lend its proprietary tokenization and custodial service to AllUnity. At the same time, Flow Traders’ liquidity provisioning knowledge is expected to be a central theme in the offer.
The planned appointment of Alexander Höptner as AllUnity’s CEO is expected to boost the project’s success, with parties pointing to his proven track record in DeFi and mainstream finance.
“The envisaged partnership between DWS, Flow Traders and Galaxy is unique,” said
Höptner. “Their market reach and expertise will enable AllUnity to develop a go-to-market strategy for a viable EUR-denominated stablecoin in order to advance the on-chain economy.”
For all the tailwinds behind AllUnity, the project has to pass through extensive legislative scrutiny from European regulators. With full incorporation slated for early 2024, the joint statement disclosed that AllUnity will be regulated by the German Federal Financial Supervisory Authority (BaFin).
AllUnity will have to clinch an E-money license from BaFin while dealing with new stablecoin regulations contained in the EU’s Markets in Crypto Assets (MiCA) regulation.
Central banks eye stablecoins with suspicion
European central banks have not hidden their skepticism for stablecoins, describing them as having the potential to disrupt the financial system of the regional bloc.
Central bank executives are pushing for the development of central bank digital currencies (CBDCs) with tokenization properties. Banque de France Deputy Governor Denis Beau
disclosed in a recent speech that CBDCs should be developed to support tokenized assets or risk a mainstream financial takeover by stablecoins.
“If we do not adapt central bank money to this evolving landscape, meaning if central bank money cannot be used to settle tokenized transactions, industry participants may turn to alternative settlement assets, such as stablecoins,” said Beau.
Watch: Centi releases first stablecoin on BSV and it’s backed by Swiss bank
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