Established in 1754, Germany’s Bankhaus von der Heydt (BVDH) has launched a stablecoin (EURB) in collaboration with Bitbond, a tokenization and digital asset custody tech provider. The stablecoin was developed on the Stellar blockchain and is fully regulated and 100% backed by the Euro.
According to the bank, this will be the first time a bank is issuing a stablecoin. The EURB token is already live but will not be openly-traded on exchanges. This is due to stringent regulatory and KYC requirements. Instead, customers who want to acquire the token will need to make a fiat currency transfer that will be held in an escrow account at the bank. The transfer triggers the issuance of the stablecoin.
It is worth stating that full control of the stablecoin’s security has been given to the bank. This includes mechanisms for minting the token and burning. Meanwhile, developers of financial applications can start using the token to transfer assets on-chain. The first use case of the stablecoin will be for “cross-border money transfers” for SatoshiPay business customers.
On the usefulness of the stablecoin, founder and CEO of Bitbond, Radoslav Albrecht said:
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.