Euro Stablecoin (EURB) on Stellar: Attack on Tether and Co?

The German Bank von der Heydt (BVDH) has issued its own Euro Stablecoin based on the Stellar network. The stablecoin runs under the abbreviation EURB and, according to the bank, is the first EUR stablecoin in the euro zone to be issued by a bank. Accordingly, the digital euro was created in cooperation with Bitcoin Revolution and Stellar.

In this article, we’ll look at the properties and why banks don’t use well-known stablecoins like Tether (USDT).

Euro Stablecoin (EURB) based on Stellar

Officially, there is now a digital euro in the euro zone, which is listed as a euro stablecoin (EURB).

The issuer is the German bank von der Heydt. The EURB is fully regulated and 100% covered by euros. However, due to regulatory requirements and strict KYC requirements, the stablecoin cannot be publicly traded.

Customers have the following options to purchase the EURB:

A transfer of fiat money must be made to a BVDH escrow account. As soon as the money lands from the secure escrow, the corresponding amount of EURB is sent to the customer.

However, concepts such as decentralization or privacy were not taken into account in the solution. The technical platform for processing EURB transactions was developed by Bitbond. Accordingly, the client, namely Bank von der Heydt, has complete control over elementary properties of the token.

This includes all mechanisms related to “burning and minting”.

Cross-border payments with EURB

Bank von der Heydt is a German bank that has existed since 1754 and primarily looks after institutional customers.

There has been a collaboration with Stellar and Bitbond for more than a year. The aim of the collaboration is to research possible applications based on DLT technology.

Philipp Doppelhammer represents the BVDH and said that the Euro Stablecoin should primarily be used for cross-border payments. The bank’s motivation arose from the non-existent existence of a euro stablecoin, which was actually issued by a „trustworthy“ institution such as a bank.

Banks wouldn’t use a stablecoin like Tether or USDC. The counterparty risks and potential problems with the regulators are too high. Both banks and institutional investors prefer trustworthy stablecoins.

Let us note that Bank von der Heydt was the first European bank to issue a euro stablecoin. This is used for cross-border payments and should primarily be accessible to banks and institutions. The EURB is 100% covered by euros and is not publicly tradable.