Deutsche Bank’s asset management arm, DWS, is forming a new venture with Michael Novogratz’s Galaxy Digital and Flow Traders to jointly issue a euro-denominated stablecoin.
DWS Group officially announced on Dec. 13 the plan to form AllUnity as part of a new partnership between DWS, Flow Traders and Galaxy to launch a “fully collateralized” euro stablecoin.
AllUnity’s operations will be regulated by the German Federal Financial Supervisory Authority, or BaFin, the announcement notes. AllUnity’s longer-term focus will be to promote the acceleration of mass adoption of digital assets and tokenization.
“Through the future creation of AllUnity, we will bridge the gap between the traditional and digital finance ecosystems to build a core infrastructure provider that facilitates secure on-chain settlement for institutional, corporate and private use,” DWS CEO Stefan Hoops said. He noted that corporations with internet-of-things businesses could use AllUnity’s stablecoin to make payments “securely and in fractions 24/7.”
Galaxy founder and CEO Novogratz also stated:
“Digital currencies are the natural evolution of the world’s payment system, and Europe — a region at the forefront of the exploration of safe, secure digital money — is paving the way for this inevitable shift.”
The planned euro stablecoin will combine DWS’ portfolio management and product-structuring expertise with Flow Traders’ liquidity services and connectivity in traditional and digital assets worldwide. Novogratz’s digital investment firm Galaxy will provide the technical infrastructure and a track record of delivering digital asset solutions, while its fully-owned subsidiary GK8 will license its tokenization and custodial services to support AllUnity.
AllUnity expects to incorporate its business in early 2024, while the stablecoin launch is expected to occur in 12 to 18 months after BaFin approval, a spokesperson for Flow Traders told Cointelegraph. “After it has been incorporated in Q1 2024, AllUnity will initiate the process for the E-money license,” the representative noted.
The issuers anticipate a period of improving regulatory clarity in the European digital asset industry, specifically expecting more clarity from the newly adopted Markets in Crypto Assets regulations (MiCA), which provide a legal framework for stablecoins and other digital assets.
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DWS has been increasingly interested in exploring blockchain technology and digital assets and reportedly considered investing in two German crypto firms in early 2023. In June, the DWS CEO disclosed plans to launch “digital twin” funds accessible to clients with digital wallets and talked about “striving to issue” a euro stablecoin.
According to Flow Traders, AllUnity plans to issue the euro stablecoin on all major public permissionless L1s and L2s, including decentralized finance, or DeFi, use cases.
In September 2023, USDC (USDC) issuer Circle launched a Stellar-based version of its euro-backed stablecoin, EURC, in addition to already supported versions on the Ethereum and Avalanche networks.
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