A euro stablecoin will be issued by one of the oldest banks in the world and will run on the Stellar blockchain network.
Bankhaus von der Heydt and Bitbond together for the first stablecoin issued by a bank
According to an announcement on Wednesday, Germany's Bankhaus von der Heydt (BVDH), founded in 1754, is partnering with digital asset tokenization and 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 and Tempo to use their stablecoin and received approval from German regulator BaFIN for issuing tokenized bonds, including on Stellar, said Radoslav Albrecht, founder and CEO of Bitbond. .
“When you use our technology to tokenize securities, you also have the on-chain payment method, but not as a volatile cryptocurrency, rather as a stablecoin,” Albrecht said in an interview.
“Banks would normally not feel comfortable using stablecoins such as tether or USDC, due to the potential counterparty risk they entail. They prefer to work with bank-issued stablecoins, and the same goes for Investors institutional ". The development of the stablecoin comes months after BVDH also experimented with tokenized securities on Stellar.
The transition to the crypto sector
BVDH, based in Monaco, has historically had a rather traditional type of business in sectors such as the stock market, fund administration and mergers and acquisitions. But a couple of years ago, he started focusing on digital assets, according to Lukas Weniger of BVDH's business development.
The main flaw with stablecoins in circulation today is the general lack of a fully licensed support bank, Weniger said. “In sistesi, stablecoin is a very sensitive product and requires a lot of trust from users,” he said.
“So, if we look at other projects, for example Tether, there is a kind of trust issue. This refers to the fact that Tether doesn't actually publish its audit reports and stuff like that. "
A fiat currency transfer is held on an escrow account with BVDH, which then triggers the issuance of the stablecoin, Weniger explained. Strict regulatory and KYC (Know-Your-Customer) requirements mean that stablecoin will not be traded openly on exchanges.
In terms of use cases, bank-issued stablecoins will make delivery versus payment (DvP) an efficient process done on a blockchain, according to Bitbond's Albrecht. “Only in Germany are we talking to several real estate developers who would like to issue token bonds, but also want an efficient payment method,” he said.
