In an exciting collaboration, Deutsche Bank‘s asset management arm, DWS Group, has teamed up with Dutch market maker Flow Traders and crypto investment firm Galaxy Digital to create AllUnity. Their big plan? Launching a euro-backed stablecoin that’s fully backed and issued by AllUnity, aiming to make tokenized assets more mainstream by combining the strengths of traditional and crypto markets.
Here’s everything you need to know about it.
Meet the Trio Behind AllUnity
This unique partnership brings together three major players. DWS Group, linked to Deutsche Bank, manages a whopping €860 billion ($927 billion) in assets. Flow Traders, busy in the crypto market since 2017, traded €2.8 trillion ($3 trillion) in assets in the first half of 2021.
Galaxy Digital, led by Michael Novogratz, covers crypto trading, asset management, and mining. It’s a combo of a trusted asset manager, a successful market maker, and a top crypto player.
Regulatory Approval to be a Challenge?
AllUnity is setting up shop in Frankfurt and plans to get an e-money license from Germany’s regulator, BaFin. Their goal? Launch the fully collateralized stablecoin within 18 months. Regulatory approval is crucial to meet all legal requirements. If all goes well, expect AllUnity to launch in Q1 2024, but only after securing a full e-money license.
Also Read: Cryptocurrency Regulations in Germany – Crypto Capital of Europe
Demand for Euro-backed Stablecoins
The stablecoin market has grown significantly in recent years, with a total value of around $130 billion dollars. While dollar-backed tokens dominate the market, euro-denominated tokens have not seen significant demand in the past two years.
According to the data analysis by Kaiko, monthly trading volumes for euro stablecoins average $90 million compared to an average of $600 billion a month for US dollar-denominated stablecoins.
However, the EU’s new regulatory framework for crypto assets may trigger greater adoption of euro-backed tokens as it provides a clearer path for financial providers looking to enter the market. Additionally, the recent increase in tokenization of traditional assets by large firms could also benefit usage.
Read More: Goodbye to Banking? Stablecoin Global Volume Reaches $7 Trillion!
AllUnity’s Winning Strategy
In a nutshell, AllUnity’s euro-pegged stablecoin aims for stability by hoarding cash and top assets like US bonds. This strategy, boosted by rising interest rates, is led by DWS Group’s financial wizards. With this powerhouse team of traditional and crypto giants, AllUnity might just be the key to making tokenized assets more widely accepted.
