German asset manager DWS joins Galaxy to issue euro stablecoin

AllUnity, a new joint venture by DWS, Galaxy, and Flow Traders, plans to issue the euro stablecoin on all major public permissionless L1s and L2s, as well as DeFi use cases.

Deutsche Bank’s asset management arm, DWS Group, is collaborating with Michael Novogratz’s Galaxy Digital and Flow Traders to launch a new euro-denominated stablecoin. This venture, named AllUnity, was officially announced on December 13 and represents a significant step in bridging traditional and digital finance ecosystems.

AllUnity, which will operate under the regulatory oversight of the German Federal Financial Supervisory Authority (BaFin), aims to facilitate the mass adoption of digital assets and tokenization. The stablecoin is described as “fully collateralized,” ensuring its value is backed by tangible assets, likely to enhance its stability and reliability.

DWS CEO Stefan Hoops emphasized the potential of AllUnity’s stablecoin in the Internet-of-Things (IoT) sector, where it could enable secure, round-the-clock microtransactions. This application underscores the growing intersection of digital finance and other technology sectors.

Galaxy Digital’s involvement, led by founder and CEO Michael Novogratz, brings technical infrastructure and expertise in digital asset solutions to the table. Galaxy’s subsidiary GK8 will contribute its tokenization and custodial services to support AllUnity.

The collaboration combines DWS’ experience in portfolio management and product structuring with Flow Traders’ liquidity services and global connectivity in both traditional and digital assets. This synergy aims to create a robust and versatile stablecoin.

AllUnity plans to incorporate its business in early 2024, with the stablecoin launch expected within 12 to 18 months following BaFin approval. The venture will seek an E-money license after its incorporation in the first quarter of 2024.

The initiative arrives at a time when regulatory clarity in the European digital asset industry is improving, particularly with the adoption of the Markets in Crypto Assets regulations (MiCA). These regulations provide a comprehensive legal framework for stablecoins and other digital assets, potentially easing the path for ventures like AllUnity.

DWS has shown increasing interest in blockchain technology and digital assets, including potential investments in German crypto firms and plans to launch “digital twin” funds accessible via digital wallets. The firm has also expressed interest in issuing a euro stablecoin.

AllUnity’s euro stablecoin is planned to be available on major public permissionless Layer 1 (L1) and Layer 2 (L2) networks, including for decentralized finance (DeFi) applications. This broad accessibility could enhance its utility and adoption across various blockchain platforms.

The move by DWS, Galaxy Digital, and Flow Traders into the stablecoin market follows other significant developments, such as the launch of Circle’s euro-backed stablecoin, EURC, on multiple networks including Stellar, Ethereum, and Avalanche. This trend reflects the growing interest and investment in stablecoins as a bridge between traditional finance and the burgeoning world of digital assets and blockchain technology.