European Stablecoin Launched On Stellar Network By German Bank
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A European stablecoin has just been launched on the Stellar network by Bankhaus von der Heydt (BVDH) based in Germany.
The financial institution has also said that this token is the first of its kind to be issued by the entity. Going live this week, the EURB stablecoin was developed on the Stellar blockchain in a collaboration with Bitbond, a digital asset custody technology provider.
Interestingly, this is fully regulated and backed one for one with the euro. It will not be openly traded on crypto platforms due to know your customer requirements and tight regulation processes.
A Fiat currency transfer is held in an escrow account at the bank if a customer wants to acquire the stablecoin. This will trigger the issuance of the asset into the user's hands.
The announcement has further stated that developers of financial applications will be able to immediately utilise the token to help settle any on-chain asset transfers. On top of this, the system, built by Bitbond, is going to give the bank complete control of the security for the coin including mechanisms for burning it or minting the token.
In the past, the bank has traditionally focused on institutional clients. After looking into the potential of distributed ledger technology, the bank made the decision to go full steam ahead with a euro stablecoin.
Philipp Doppelhammer, managing director at the bank said:
“We were drawn to Bitbond and Stellar due to the ease in which assets are issued and managed on the network."
Cross-border money transfers are going to be the first use case for the project.
Talking about other stablecoin projects in the industry, Lukas Weniger, business development manager at the bank, said that the lack of fully licensed institutions is the biggest reason as to why they fail.
To that end, the chief executive officer of Bitbond, Radoslav Albrecht highlighted:
“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.”