The former head of the BitMEX cryptocurrency exchange, Alexander Höptner, will head a new company to issue a stablecoin pegged to the euro.
The European Union’s new regime for crypto assets, which includes rules for stablecoins, offers a clearer path for financial providers looking to enter the market and could spark wider adoption of euro-denominated tokens.
According to Bloomberg, Deutsche Bank and Dutch market maker Flow Traders will be partnering with crypto fund manager Galaxy Digital Holdings to create a euro-backed stablecoin.
The new firm, called AllUnity, will be based in Germany and has plans to drive wider adoption of tokenized assets. Höptner says the plan is for DWS to manage the reserves of the proposed stablecoin.
AllUnity will launch in the first quarter of 2024 after receiving initial regulatory approvals, but will only launch its stablecoin after receiving a full electronic money license, according to a company statement.
The initiative comes amid the imminent introduction of cryptocurrency regulation in the European Union called Market in Crypto Assets (MiCA).
However, dollar-pegged stablecoins remain more popular than their digital euro counterparts.
Tether, the $90 billion market leading stablecoin behemoth, is followed by USDC, which has a market cap of $24 billion, both of which are pegged to the U.S. dollar.
AllUnity is the just latest in a crowded stablecoin market but eyes are now on the German backed reserve to add to what is already a $128 billion market.