A euro stablecoin is being issued by one of the oldest banks in the world and it’s being done on the Stellar blockchain network.
Announced Wednesday, Germany’s Bankhaus von der Heydt (BVDH), established in 1754, is working with tokenization and digital asset custody technology provider Bitbond for the first direct issuance of a stablecoin by a banking institution on Stellar, the companies said.
Bitbond has already partnered with the Stellar Development Foundation to issue a euro-denominated stablecoin with Tempo, and has also received approval from the German regulator BaFIN to issue tokenized bonds, also on Stellar, said Radoslav Albrecht, Bitbond founder and CEO.
“When using our technology to tokenize securities, you also have the payment method on-chain – but not as a volatile cryptocurrency, as a stablecoin,” said Albrecht in an interview. “Banks normally wouldn’t feel comfortable using [stablecoins] like Tether or USDC, due to the potential counterparty risk that is behind them. They prefer to work with stablecoins issued by banks, and the same is true for institutional investors.”
Munich-based BVDH had enjoyed a pretty traditional boutique business in areas like securitization, fund administration and M&A. But a couple of years ago, it became very focused on digital assets, according to Lukas Weniger, BVDH head of business development.
The main shortcoming of stablecoins in circulation today, is the general lack of a fully licensed bank behind them, Weniger said.
“The stablecoin is a very sensitive product, and it requires a lot of trust from the users at the end of the day,” he told CoinDesk. “So if we look at other projects, for…
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