DWS, Galaxy Digital, Flow Traders Unveil Euro Stablecoin Project

DWS, the asset management division of Deutsche Bank, is partnering with Flow Traders and Galaxy Digital, both owned by Michael Novogratz, to jointly issue a stablecoin denominated in euros. DWS, Flow Traders, and Galaxy will launch a “fully collateralized” euro stablecoin through a new partnership.

On December 13, DWS Group formally announced its intention to create AllUnity as part of this partnership. According to the announcement notes, the German Federal Financial Supervisory Authority, or BaFin, will oversee the operations of AllUnity.

In the long run, AllUnity will strive to expedite the widespread implementation of digital assets and tokenization. According to Stefan Hoops, the CEO of DWS, the establishment of AllUnity in the future will serve as a means to connect the conventional and digital finance ecosystems.

This infrastructure provider will enable secure on-chain settlements for the benefit of corporations, institutions, and individuals. He noted that corporations with internet-of-things operations could “securely and in fractions around the clock” use AllUnity’s stablecoin to make payments.

Additionally, Novogratz, founder and CEO of Galaxy, stated that the euro stablecoin in development will integrate the portfolio management and product-structuring capabilities of DWS with the liquidity services and global connectivity of Flow Traders for traditional and digital assets.

“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.”

Novogratz’s digital investment firm, Galaxy, will contribute its expertise in delivering digital asset solutions and its technical infrastructure. Concurrently, tokenization and custodial services provided by its wholly-owned subsidiary, GK8, will be licensed to support AllUnity.

According to a Flow Traders spokesperson, AllUnity expects to incorporate its business in early 2024 and launch the stablecoin within 12 to 18 months after receiving BaFin approval. “Upon incorporation in the first quarter of 2024, AllUnity will commence the application process for an electronic money license,” the representative explained.

The issuers foresee a phase in which regulatory clarity will increase in the European digital asset sector with the Markets in Crypto Assets Regulations (MiCA), which establish a legal structure for stablecoins and other digital assets, providing particular clarity.

Blockchain technology and digital assets have reportedly attracted more attention from DWS, which contemplated investing in two German crypto firms at the beginning of 2023. The CEO of DWS announced in June his intention to introduce “digital twin” funds that would be available to customers using digital wallets.

Additionally, he stated that he was “making every effort” to issue a euro stablecoin. AllUnity intends to issue the euro stablecoin on all main public permissionless L1s and L2s, including decentralized finance (DeFi) use cases, per Flow Traders.

Circle, the issuer of USDC, introduced a Stellar-based iteration of EURC, its euro-backed stablecoin, in September 2023. Previously, the Ethereum and Avalanche networks supported versions of EURC.