DWS Group, a subsidiary of Deutsche Bank, has teamed up with Galaxy Digital and Flow Traders to establish AllUnity, a venture aimed at issuing a euro-denominated stablecoin. This strategic move, officially announced on December 13, is set to revolutionize the landscape of digital finance.
Regulation and Long-Term Vision
Notably, AllUnity’s operations will fall under the regulatory oversight of the German Federal Financial Supervisory Authority (BaFin). This will further ensure a compliant and secure framework. The venture’s overarching goal is to expedite the widespread adoption of digital assets and tokenization. Further, it will act as a pivotal infrastructure provider.
Stefan Hoops, CEO of DWS, emphasized the transformative nature of AllUnity. He stated,
“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.”
Use Cases and Industry Impact
Highlighting the practical applications of the stablecoin, Hoops pointed out its potential for corporations engaged in internet-of-things businesses. AllUnity’s stablecoin could facilitate secure and fractional 24/7 payments, ushering in a new era of financial transactions.
Galaxy’s Founder and CEO, Michael Novogratz, expressed his perspective on the evolution of payment systems. He asserted,
“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.”
Strategic Collaboration and Technical Infrastructure
The planned euro stablecoin will leverage the combined expertise of DWS in portfolio management and product structuring. Additionally, it will also leverage Flow Traders’ proficiency in liquidity services, and Galaxy’s technical infrastructure prowess. Galaxy’s subsidiary, GK8, will contribute by licensing its tokenization and custodial services to support AllUnity.
Anticipating the incorporation of its business in early 2024, AllUnity aims to launch the stablecoin within 12 to 18 months after receiving BaFin approval. The spokesperson for Flow Traders emphasized the initiation of the E-money license process after incorporation in Q1 2024.
Industry Outlook, Expansion Plans and Market Dynamics
Navigating the evolving regulatory landscape, the issuers foresee improved clarity. This is especially with the implementation of the Markets in Crypto Assets regulations (MiCA) in Europe. Also, these regulations are expected to provide a legal framework for stablecoins and other digital assets. This will further foster a conducive environment for AllUnity’s endeavors.
AllUnity is poised to issue the euro stablecoin across major public permissionless L1s and L2s, including decentralized finance (DeFi) use cases. This strategic expansion aligns with the growing trend in the digital asset industry, as demonstrated by Circle’s launch of a Stellar-based version of its euro-backed stablecoin in September 2023.