German Reaction Towards Circle and Tether: Achievement of Desired Outcomes?
Allunity, a joint venture between Deutsche Bank, DWS, Galaxy Digital, and Flow Traders, has announced the launch of its EURAU stablecoin. According to Payment & Banking, Peter Großkopf has joined Allunity to spearhead this new venture.
EURAU is designed to be a leading regulated euro-backed stablecoin in Europe, offering a distinct competitive edge over incumbents like Tether and Circle's offerings. The key factors contributing to EURAU's market position and success potential are:
Regulatory Compliance
EURAU is the first euro stablecoin to be fully compliant with the EU's Markets in Crypto-Assets Regulation (MiCA), effective from December 30, 2024. This regulatory compliance gives EURAU formal legitimacy and regulatory certainty, which major competitors like Tether's USDt lack in Europe. Tether's euro stablecoin (USDt) has been removed from major European exchanges due to non-compliance, positioning EURAU as a safer, preferred option.
Institutional Backing and Infrastructure
Allunity's partners provide deep European banking infrastructure, liquidity, brand trust, and direct access to institutional clients. This strong institutional foundation supports greater adoption by banks, fintechs, and corporates. 21X is a confirmed partner for Allunity's stablecoin, further strengthening its institutional backing.
Transparency and Auditing
EURAU promises full 1:1 collateralization with euros held in EU-regulated banks, routine transparency via proof-of-reserves, and comprehensive regulatory reporting beyond standard audits. This aligns with traditional financial standards and appeals to risk-averse institutional users and compliance departments.
Market Opportunity
Europe is emerging as a strategic battleground for regulated stablecoins, with an estimated potential liquidity pool in the trillions of euros. EURAU is designed to serve this growing market for tokenized payments, programmable finance, cross-border settlements, digital treasury management, and DeFi applications.
Comparison to Competitors
While Circle's Euro Coin (EURC) is also MiCA-compliant and active in Europe, EURAU's unique combination of heavyweight institutional partnership and full regulatory licensing may provide it an edge in liquidity and institutional trust. By contrast, Tether's stablecoins still face regulatory hurdles and decreased accessibility in Europe, limiting their market share and enterprise adoption there.
In summary, EURAU is well-positioned to capitalize on the growing demand for regulated euro stablecoins in Europe, with clear advantages in compliance, institutional credibility, transparency, and banking infrastructure. Although Circle's EURC is a strong competitor, the combined strength of Allunity's partners and regulatory framework gives EURAU high potential to capture significant market share and succeed as an institutional-grade euro stablecoin. Meanwhile, Tether's stablecoins are increasingly marginalized in the European market due to regulatory non-compliance.
Allunity aims to become the most relevant provider from Europe in the stablecoin market. Alexander Höptner leads Allunity, which has joined the Banking Association, and is planning to achieve wide adoption among institutional market participants to contribute to the stablecoin's success. DWS offers tokenized securities that can be paid for with a digital currency, i.e., a stablecoin. As of 23.07.2025, Tether's stablecoins have a market capitalization of $162 billion, out of a total stablecoin market capitalization of $269 billion.
Stablecoins are often used in arbitrage trades to exploit price differences of cryptocurrencies on different platforms. They are primarily used for buying crypto assets and provide more stability than cryptocurrencies due to their peg to real currencies. Allunity's stablecoin, EURAU, targets institutional market participants, including trading platforms and market makers. Escrow accounts for traders using smart contracts are a possible application for Allunity's stablecoin.
[1] Payment & Banking [2] CoinDesk [3] The Block [4] Finextra
- The institutional backing and infrastructure provided by Allunity's partners, including deep European banking infrastructure and liquidity, positions EURAU to attract banks, fintechs, and corporates in the rapidly growing European market for tokenized payments, programmable finance, and digital treasury management, offering an edge over competitors like Tether and Circle.
- Regulatory compliance, transparency, and auditing in line with traditional financial standards will appeal to risk-averse institutional users and compliance departments, potentially giving EURAU an advantage over competitors in terms of regulatory certainty and market share, especially as Europe becomes a strategic battleground for regulated stablecoins with an estimated potential liquidity pool in the trillions of euros.
