German Bank von der Heydt, which was established in 1754, made on Monday the announcement that it’s developing a special-purpose Euro stablecoin.
The aim of this stablecoin will be to make tokenized securities private placements easier for investors. The bank closed a partnership with Bitbond, the blockchain financial services provider, in order to integrate tokenization into its platform. Digital securities are going to be tokenized onto the Stellar blockchain, so institutional clients will be able to make private placements.
Tokenization Eliminates Frictional Costs
According to the bank, tokenization eliminates frictional costs associated with equity sales. This is what a bank’s representative wrote on Monday:
“Securities can be traded directly without an intermediary, making financing much cheaper and less complicated.”
Custody Solution Already Developed
It seems that at the moment, von der Heydt has no plans to give the broad public access to its platform. Back in 2019, it developed with Bitbond a custody solution for clients to safely store tokenized equity. BaFin, the German financial regulator approved this custody solution after the law was changed and started to require a license for crypto custody providers. Investors will be given the option to purchase tokenized equity with the von der Heydt-issued Euro stablecoin. Stablecoins will be converted from Euros and stored in the custody solution provided by the bank.
Digital Euro Payments Will Happen in Real-Time and Faster
Bitbond’s CEO and founder Radoslav Albrecht said the beginning of April will mark the deployment of the production version and that:
“Digital euro payments will happen much faster, there will be a real-time, on-chain DvP and the bank doesn't need to involve a third-party paying agent but can provide everything independently.”
DvP stands for delivery versus payment of securities. Bitbond’s tokenized bond was approved by BaFin in January 2019. The blockchain financial services provider launched the first security token offering (STO) that was regulated in Germany later in 2019.