One of the oldest banks in the world, Bankhaus von der Heydt, has issued a Euro stablecoin on the Stellar blockchain network.
The Munich-based BVDH, one of the world’s oldest banks, is also one of the first banks to implement blockchain technology. The bank announced on 9 December that it had partnered with financial technology provider Bitbond for the first direct issuance of a stablecoin by a financial institution on the Stellar network and one of the first in the crypto world. The Euro Stablecoin (EURB) is now live on Stellar and can be used for securitization and or by any business or individual who would like to access EUR through Stellar.
Also involved is the Stellar Development Foundation. SDF is the non-profit behind the Stellar blockchain network. Bitbond teamed up with SDF for a Euro-denominated stablecoin. In 2019, Bitbond issued the first-ever tokenized securities approved by German financial regulator BaFin.
Bitbond founder and CEO Radoslav Albrecht had this to say:
“When using our technology to tokenize securities, you also have the payment method on-chain – but not as a volatile cryptocurrency, as a stablecoin. 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.”
BVDH Goes Crypto with Euro Stablecoin (EURB)
Until recently, BVDH was focused on traditional banking services. In the last couple of years, however, the institution has taken a keen interest in cryptocurrencies.
The new stablecoin is expected to have gain public trust. Unlike most stablecoins currently in circulation, EURB has the backing of a fully licensed bank.
Lukas Weniger, in charge of Business Development at BVDH said this in an interview with Coindesk:
The stablecoin is a very sensitive product, and it requires a lot of trust from the users at the end of the day. So if we look at other projects, for example Tether, there’s a kind of a trust issue. It relates to the fact Tether is not really publishing [its] audit reports and stuff like that.”
Wenger went on to state that due to strict regulations and KYC requirements, stablecoin will not be available for trading on exchanges.
Speaking on potential uses, Albrecht cited Delivery versus Payment as a process made easier by the new stablecoin.
Mercy Mutanya is a Tech enthusiast, Digital Marketer, Writer and IT Business Management Student.
She enjoys reading, writing, doing crosswords and binge-watching her favourite TV series.
