The German bank Bankhaus von der Heydt, or BVDH, has launched euro stablecoin on the Stellar network. The bank claims that the token is the first product of this type issued by a banking institution. EURB, which entered into force today, was created on the Stellar network in collaboration with Bitbond, a provider of tokenization and custody technology for digital assets.
An asset that is fully regulated and backed by Euro will not be tradable on exchanges due to regulatory and KYC requirements. If the customer wants to purchase a stablecoin, the fiat currency transfer is carried out in an escrow account with BVDH. The announcement says that financial application developers can immediately use this token to settle transfers in the chain. The underlying platform built by Bitbond gives the bank full control over the security of stablecoins, including the burning and knockout mechanisms.
One year of research on DLT technology
BVDH, which was founded in 1754, has traditionally focused on institutional clients. The decision to use Stellar and Bitbond (working together since 2019) was made after nearly a year of research into DLT technology. BVDH Managing Director Philipp Doppelhammer explained:
We were attracted to Bitbond and Stellar by the ease of issuing and managing assets online.
Doppelhammer stated that the first use of EURB will be for “cross-border money transfers” for SatoshiPay’s business customers.
Lukas Weniger, BVDH’s business development manager, said that the lack of a fully licensed bank to support today’s stable coins is their biggest drawback. Bitbond founder and CEO, Radoslav Albrecht, noted:
“Banks would not normally be comfortable using stable coins such as Tether or USDC due to the potential counterparty risk behind them. […] They prefer to work with stablecoins issued by banks, and the same applies to institutional investors. “
The German regulatory authority has already approved the issue of tokenized bonds on the Stellar blockchain.
Earlier this week, German private bank Hauck & Aufhäuser announced its first crypto fund. HAIC Digital Asset Fund I, launched on January 1, 2021, will support Bitcoin (BTC), Ethereum (ETH) and Stellar (XLM).