Deutsche Bank's asset management arm, DWS, has joined forces with the crypto investment firm Galaxy Digital and the liquidity provider Flow Traders to introduce a joint venture focused on creating a EUR-denominated stablecoin.
Bridging Traditional and Digital Finance
The collaboration, named AllUnity, aims to bridge the gap between traditional and digital finance ecosystems and is poised to become a core infrastructure provider for secure on-chain settlements. Scheduled to launch within the next 18 months, AllUnity represents a strategic effort to accelerate the mass market adoption of digital assets and tokenization.
The venture will operate under the regulatory oversight of BaFin, Germany's financial supervisory authority, ensuring compliance with stringent financial standards. Stefan Hoops, the CEO of DWS, expressed enthusiasm about AllUnity's potential impact on the financial landscape.
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."
Hoops provided an example of the innovative applications, stating: "For instance, corporates with IoT businesses could use our regulated EUR stablecoin to make payments in fractions and 24/7 securely, and at their own convenience."
As part of the collaboration, AllUnity will leverage tokenization and custodial technology from Galaxy Digital's subsidiary, GK8. This strategic move positions AllUnity at the intersection of cutting-edge technology and financial expertise.
The venture's leadership will be entrusted to Alexander Höptner, a seasoned professional with experience at BitMEX, Börse Stuttgart, and Deutsche Börse. Höptner highlighted the regulatory advantages AllUnity stands to gain, especially in the wake of the newly adopted Markets in Crypto Assets Regulation. This regulation, now in force within the EU, provides a harmonized legal framework for stablecoins, offering increased protection for market participants.
"AllUnity will be able to leverage MiCAR, which we believe will contribute to growing the stablecoin market as it provides a robust regulatory framework that enhances investor protection and market integrity," Höptner said. "In the coming period, we will focus on building a strong team of talented crypto, financial markets, technology, and regulation experts to deliver on our mission."
The establishment of AllUnity comes at a time when the regulatory landscape for digital assets is evolving, and the venture is poised to make contributions to the broader adoption of stablecoins in the financial market.
Deutsche Bank's Pursuit of Digital Asset License
In June, Finance Magnates reported that Deutsche Bank applied for a digital asset license from Germany's financial market regulator, BaFIN, to provide custody services for digital assets, including cryptocurrencies. The move has aligned with the bank's strategy to expand its digital assets and custody business.
Deutsche Bank's corporate banking division aims to enhance fee income and is following the path of its investment arm, DWS Group, which has ventured into digital asset-linked services. In Q1 2023, Deutsche Bank reported pre-tax profits of €1.9 billion, marking an increase of 8%, with corporate banking division revenue rising 35% to €2 billion.
This article was written by Tareq Sikder at www.financemagnates.com.
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