One of the oldest banks in the world is issuing a euro stablecoin, and it is being done on the Stellar blockchain network.
The Bankhaus von der Heydt (BVDH) of Germany, founded in 1754, announced on Wednesday that it is working with tokenization and digital asset custody technology provider Bitbond for the first direct issuance of a stablecoin by a Stellar banking institution.
Radoslav Albrecht, founder and CEO of Bitbond, said that Bitbond has already collaborated with the Stellar Development Foundation and Tempo to use their stablecoin, and has obtained permission from German regulator BaFIN to issue tokenized bonds, also on Stellar.
“You also have the payment method on-chain when using our technology to tokenize securities, but not as a volatile cryptocurrency, as a stable coin,” Albrecht said in an interview. “Due to the possible counterparty danger behind them, banks will usually not feel comfortable using [stablecoins] such as tether or USDC. They tend to deal with bank-issued stable coins, and so do institutional investors.”
The development of stablecoin comes months after BVDH experimented with tokenized securities on Stellar.
In areas such as securitization, fund management and M&A, the Munich-based BVDH has enjoyed a fairly conventional boutique sector. But a few years ago, according to Lukas Weniger of BVDH Business Growth, it became very dependent on digital properties.
The key shortcoming of stablecoins in circulation today, Weniger said, is the general absence of a completely licensed bank behind them.
According to Bitbond’s Albrecht, bank-issued stablecoins would allow distribution versus payment (DvP) an effective process carried out on a blockchain in terms of use cases.
