Asset manager DWS announced plans to launch the first regulated euro-denominated stablecoin in 2025. The firm's CEO, Stefan Hoops, said a new joint venture called AllUnity will issue the stablecoin.

Regulation and Demand

Hoops stated that Germany's financial regulator, BaFin, will fully regulate the stablecoin. This regulatory oversight aims to provide the market with a secure and reliable stablecoin. He added that the firm expects early demand for stablecoin from crypto investors and anticipates growing interest from other sectors over time.

"By the medium term, we expect wider demand, for instance, from industrial companies working with 'internet of things' continuous payments," said Hoops.

Formation of AllUnity

DWS incorporated AllUnity with Flow Traders and Galaxy Digital in June. This joint venture marks a Germany-based attempt to create a euro stablecoin. AllUnity is headquartered in Frankfurt and aims to secure regulatory approval from BaFin for its upcoming stablecoin.

BaFin's Role and MiCA Rules

Currently, BaFin has not granted its e-money license regulation to any stablecoin. This means that DWS would be the first to receive approval for such a product. BaFin has yet to comment on the matter. This development comes shortly after the EU-wide Markets in Crypto-Assets (MiCA) rules concerning stablecoins took effect on June 30.

Market Impact and Competitors

Data indicates that the new MiCA rules have impacted the stablecoin market cap in Europe. Few stablecoin issuers have explicitly claimed compliance with these rules. On July 1, Circle announced that its USDC and EURC stablecoins comply with MiCA, calling itself the first global stablecoin issuer to gain approval.

DWS's Market Presence

DWS is majority-owned by Deutsche Bank and manages 941 billion euros (approximately $1 trillion). In April, DWS launched crypto exchange-traded commodities (ETCs). This move into the stablecoin market marks another significant step in the firm's expansion into digital assets.