DWS Plans To Launch First German-Regulated European Stablecoin

DWS, a top fund company in Europe, has launched a new stablecoin as it is set to unveil Germany’s first legal cryptocurrency next year. The company’s Chief Executive Officer, Stefan Hoops, shared the news and said many big financial firms compete to introduce their digital coins.

DWS Aims To Launch The First Euro-Backed Stablecoin In 2025

DWS is controlled by renowned Deutsche Bank and manages over $1 trillion (941 billion euros) globally. Hoops said DWS aims to launch the first euro-backed stablecoin in 2025. Germany’s BaFin watchdog will regulate this stablecoin. However, BaFin hasn’t made any comment on the matter.

DWS earlier stated that the token would be unveiled by June next year. It didn’t reveal if there was any delay in the plan. Stablecoins are digital coins that are created to stay at the same value. This means these coins won’t record any change in prices. They are backed by regular currencies like the U.S. dollar or euro. BaFin hasn’t yet given a license for an e-money stablecoin, and DWS wants to be the first one.

AllUnity, the company that created the token, was formed through the collaboration between DWS and specialist firms Galaxy and Flow Traders. AllUnity began its operations in Frankfurt in June. While more companies are curious about digital tokens, some argue investors have yet to learn how useful they are. However, Hoops from DWS expected various clients to be interested.

Hoops predicts that investors will want more digital assets shortly. He said that there will be more demand from people worldwide. He illustrated that companies in industries like the “Internet of Things” might start using continuous payments.

Tether Leads The Stablecoin Market With $112 Billion In Circulation Out Of $162 Billion

Many big banks like PayPal and Societe Generale are exploring the creation of stablecoins. Tether controls most of the stablecoin market, with $112 billion in circulation out of $162 billion.

As interest rates increased, Tether claims it made billions of dollars in profits from its reserves, including secured loans, Treasuries, and bitcoin. Issuers of stablecoins create the tokens and keep the actual fiat currency in reserves. The reserved currency can then be invested for returns.

Regulators are worried that increasing stablecoin reserves could pose more significant risks to the overall financial system. This is because stablecoins connect the cryptocurrency world with regular financial markets.

BaFin has generally been skeptical of cryptocurrencies. The regulator previously asked for global rules for the sector. However, it has a different opinion on stablecoins. European Union rules that demand stablecoins to be regulated were implemented last month. Euro-backed stablecoins haven’t been as popular as those linked to the dollar until now.