- Deutsche Bank’s DWS has partnered with two financial institutions.
- The trio will form a stablecoin coin offering firm.
- Several traditional financial institutions have ventured into the cryptocurrency industry this year.
The upswing of the cryptocurrency industry has seen an influx of traditional financial institutions seeking to capitalize on its benefits. In 2023, major banking and investment institutions ventured into the sector, offering assets such as Bitcoin, Ethereum, and stablecoins to retail and institutional investors.
Deutsche Bank-owned asset management firm DWS Group joins the ranks, which is now set to offer stablecoins under a new partnership.
DWS, Flow Traders, and Galaxy Unite for Euro-Backed Stablecoin
On December 13, DWS announced its partnership with Netherlands-based market maker Flow Traders Ltd and digital asset firm Galaxy Digital Holdings to establish AllUnity.
Sponsored
AllUnity will offer a range of crypto services, focusing on a euro-denominated stablecoin issuance to institutional, corporate, and private investors, leveraging the strong core capabilities of each partner.
Based in Frankfurt, Germany, AllUnity will apply for the E-money license with the German financial authority BaFin to ensure regulatory compliance measures within the region. The firm will commence operations in the first quarter of 2024 but will only roll out its stablecoin upon necessary license acquisition.
Regarding leadership, the firm will be led by former crypto exchange BitMex head Alexander Höptner, who emphasized the importance of collaboration in expanding the stablecoin market.
Sponsored
“AllUnity will also be able to leverage MiCAR, which we believe will contribute to growing the stablecoin market as it provides a robust regulatory framework that enhances investor protection and market integrity,” he said.
DWS Group is also reportedly making strides towards establishing spot exchange-traded funds for the European financial market, aligning with the growing anticipation in the United States.
TradFi Institutions Leveraging Crypto ETFs
BlackRock, Grayscale, and Fidelity Investments have been all the buzz in the crypto industry with their spot ETF applications, seeking a regulatory nod from the Securities and Exchange Commission (SEC).
While the commission is yet to decide its stance on the proposals, the potential benefits of spot ETFs as a more ‘legitimate’ way to invest in the crypto sector have heightened investor expectations.
VanEck, another asset management firm, recently updated its Bitcoin Trust application with a ‘HODL’ ticker while awaiting the commission’s decision on its proposal to offer exchange-traded funds.
Other institutions, including Hashdex and Bitwise, are also in the race for spot ETFs.
On the Flipside
- The industry’s leading stablecoins are Tether (USDT) and Circle-owned USDC, with a combined market capitalization of nearly $115 billion.
- In November 2023, traditional banking institutions UBS Group and Santander Bank ventured into the industry.
- Deutsche Bank launched its crypto services in March 2021.
Why This Matters
DWS, Flow Traders, and Galaxy are three world-class firms with significant market reach, and their entry into the crypto industry has the potential to accelerate the mass adoption of digital assets.
Read to learn more on spot ETF application in the U.S:
What a Bitcoin Spot ETF Approval Could Signify for Users
Uniswap is coming to Bitcoin to exchange accessibility. Read more:
Uniswap Charges Accessibility With Rootstock Integration
