A Euro stablecoin has been launched on the Stellar network by Germany's Bankhaus von der Heydt (BVDH).
According to the bank, the banking institute is to issue the first token of its kind. The Stellar blockchain partners with Bitbond - a tokenization and digital asset custody technology provider - to develop the EURB stablecoin. Fully regulated and backed 1:1 with Euros, the asset will not be openly traded on exchanges as a result of tight regulatory and know-your-customer (KYC) requirements.
A fiat currency transfer is held in an escrow account at the BVDH if a customer wants to acquire the stablecoin, leading to issue the EURB. As per the announcement, developers of financial applications can use the token to settle asset transfers on-chain instantly. The underlying platform which is built by Bitbond allows the bank to take full control over the stablecoin's security, covering mechanisms for burning and minting the token.
Established in 1754, BVDH has traditionally centered on institutional clients in securitization-related transactions. The choice to use Stellar and Bitbond was made following roughly one year of exploring distributed ledger technology (DLT), Philipp Doppelhammer - BVDH managing director - expounded: "We were drawn to Bitbond and Stellar due to the ease in which assets are issued and managed on the network."
The EURB's first use case will be for "cross-border money transfers" for blockchain payments firm SatoshiPay's business customers, Doppelhammer noted.
Lukas Weniger - BVDH business development manager - noted that the major setback is the lack of a fully licensed bank backing today's stablecoins. Radoslav Albrecht - Bitbond founder and CEO - stated: "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."
Bitbond has already gained approval from the German regulator Federal Financial Supervisory Authority to issue tokenized bonds on Stellar.
Hauck & Aufhäuser - a German private bank - claimed earlier this week that the HAIC Digital Asset Fund I - its first crypto fund - will be launched on Jan. 1 next year, and BTC, Ether, and Stellar's XLM will be included.