AllUnity, the stablecoin startup funded by Deutsche Bank, has achieved official recognition. The startup has been granted an E-Money Institution (EMI) license from Germany’s financial watchdog BaFin. The grant paves the way for the firm to introduce EURAU, a euro-backed stablecoin.
This stablecoin is designed to meet the European Union’s new Markets in Crypto-Assets (MiCA) regulatory regime.EURAU will have institutional-grade proof-of-reserves and financial reporting, a statement released on Wednesday said. Amsterdam-based Flow Traders will manage the project's liquidity.
AllUnity’s regulatory nod arrives as Europe becomes a focal point for stablecoins in the aftermath of MiCA’s implementation on December 30, 2024. This regulation imposes rigorous compliance standards on crypto assets. The statute has compelled non-compliant tokens such as Tether’s USDt off some exchanges that operate within the European Economic Area.
By securing BaFin approval, EURAU is one of the first euro-denominated fully functional stablecoins.. This makes it primed to secure institutional onboarding across enterprise treasuries, fintechs, and regulated financial platforms.
Enforcement under MiCA has previously resulted in MiCA-regulated exchanges deciding to delist USDt. This is the largest stablecoin in the market, from Binance, Coinbase, and Kraken, for European users.
Tether has failed to declare compliance with the MiCA regulations. This allows its MiCA-regulated peers to step in and fill the supply gap.
Over the past few weeks, Paxos has introduced its MiCA-registered Global Dollar (USDG) into the EU. Circle has announced ongoing growth in its MiCA-standard Euro Coin (EURC) and USD Coin (USDC).
Circle’s euro-backed EURC experienced an increase in market cap since the regulation came into place.
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Despite increasing regional rivalry, Tether’s USDt remains the world leader, with a market cap of nearly $158 billion. This cryptocurrency is significantly ahead of USDC at less than $62 billion. Above all, such full-faced regulatory support, euro-centricity, and institutional structure may give EURAU a huge niche.
This is a big advantage in the ever-changing digital asset landscape in Europe. Especially so, as the EU now moves toward clamping down on and organizing at the local level.