BaFin Approves Euro-Pegged Stablecoin
Posted by Colin Lambert. Last updated: July 7, 2025
Germany’s financial regulator has given its approval to a euro-pegged stablecoin, the first to secure such an accolade, which will be issued by AllUnity, a joint venture between DWS, Flow Traders and Galaxy.
The stablecoin will be called EURAU and it will be fully compliant with the Markets in Crypto-Assets Regulation (MiCAR) framework, after BaFin granted AllUnity an E-Money Institution license.
The move comes at a time when German financial institutions are showing growing appetite for digital assets, with Deutsche Bank expected to launch a crypto custody service next year and Sparkassen, the country’s largest banking group making bitcoin available on its app.
EURAU will be 100% collateralised and it promises to deliver institutional-grade transparency through proof-of-reserves and regulatory reporting. Users of EURAU are expected to be regulated financial institutions, fintechs, Treasuries (ERP) and enterprise clients and its primary use case will be cross-border settlement.
The EU’s MiCA regulation requires stablecoin issuers to meet strict criteria, including holding at least 60% of the backing assets with European banks for stablecoins that have more than 10 million users. This requirement has stopped Tether, the issuer of the largest stablecoin in the world, from applying for a license under European regulations.
In the US, stablecoins regulations are in the process of crystallising as the so-called Genius Act and the market structure focused Clarity Act make their way into legislation.
Currently, euro-pegged stablecoins take up a minuscule share of the $255 billion market where they represent $500 million worth of assets, however, they are growing fast. While the overall stablecoins space registered 57% of growth in market cap in the past 12 months, euro-pegged peers clocked up 104% in the same period.
Commenting on the BaFin approval, Stefan Hoops, CEO of DWS, says that “bringing the euro on the blockchain represents a foundational building block for the future of the European financial and real economy.”
