In a significant development in the digital asset sector, Deutsche Bank‘s investment management arm, DWS Group, has announced a strategic partnership with Galaxy Digital and Flow Traders to introduce a new euro-denominated stablecoin. This venture, named AllUnity, marks a notable collaboration in the financial world, blending traditional and digital finance.
Deutsche Bank, Galaxy Digital Unite for Stablecoin Project
AllUnity, the product of the collaboration between DWS Group, Galaxy Digital, and Flow Traders, is set to launch a fully collateralized euro stablecoin. This initiative is positioned under the regulatory oversight of the German Federal Financial Supervisory Authority (BaFin). AllUnity’s mission extends beyond merely issuing a stablecoin; it aims to facilitate the widespread adoption of digital assets and tokenization.
Stefan Hoops, CEO of DWS, emphasized the venture’s potential in bridging the gap between traditional finance and the burgeoning digital finance ecosystem. He highlighted the utility of the forthcoming stablecoin for corporations, especially those in the internet-of-things sector, enabling secure and continuous payment operations.
Michael Novogratz, founder and CEO of Galaxy, echoed the sentiment, underscoring the evolutionary trajectory of digital currencies and Europe’s role in pioneering secure digital money systems.
The planned stablecoin is a culmination of diverse expertise from the collaborating entities. DWS brings its prowess in portfolio management and product structuring, while Flow Traders contributes its liquidity services and global connectivity in both traditional and digital assets. Galaxy Digital’s robust technical infrastructure and digital asset solution delivery history will be pivotal in the venture. Galaxy’s subsidiary GK8 is also set to offer tokenization and custodial services to support AllUnity.
The incorporation of AllUnity is slated for early 2024, with the stablecoin launch anticipated within 12 to 18 months following BaFin approval. The preparatory phase for the E-money license will commence post-incorporation in the first quarter of 2024.
Regulatory Landscape and Market Context
This initiative arrives at a time of evolving regulatory clarity in Europe’s digital asset industry. The Markets in Crypto Assets regulations (MiCA), recently adopted, provide a comprehensive legal framework for stablecoins and other digital assets, likely influencing the development of AllUnity’s stablecoin.
DWS’s foray into blockchain technology and digital assets has been evident, with the CEO revealing plans in June for “digital twin” funds and a euro stablecoin. AllUnity’s stablecoin is set to be issued on major public permissionless Layer 1 and Layer 2 networks, including decentralized finance (DeFi) applications. This move aligns with the broader trend of traditional finance institutions embracing digital asset technologies.
In the context of stablecoin development, AllUnity’s venture follows the launch of the Stellar-based euro-backed stablecoin, EURC, by USDC issuer Circle in September 2023. This reflects the growing interest and investment in stablecoin solutions across various blockchain networks.
The formation of AllUnity and the planned launch of its euro stablecoin signify a noteworthy convergence of traditional and digital financial sectors. This collaboration of DWS, Galaxy Digital, and Flow Traders underlines the growing interest and confidence in digital asset solutions within mainstream financial institutions.
With regulatory frameworks like MiCA providing clearer guidance, such ventures are poised to play a crucial role in shaping the future of finance. As the digital asset landscape continues evolving, AllUnity’s initiative marks a significant step towards integrating digital solutions into everyday financial operations, potentially transforming how businesses and consumers interact with money.
