Unstoppable Finance, a decentralized finance (DeFi) project behind the self-custodial wallet Ultimate, published a blog post on Tuesday announcing it will launch a “DeFi-native” bank to rebuild Europe’s financial system and address risks highlighted by the recent banking crisis. Additionally, Unstoppable will also roll out a blockchain-based, fiat-backed Euro stablecoin.
A Defi-Native Bank and a Fiat-backed Euro Stablecoin
German decentralized fintech Unstoppable Finance announced plans to develop the first fully regulated “DeFi-native” bank in Europe, offering a broad range of traditional finance (TradFi) and DeFi banking and financial services. In addition, Unstoppable said it would also build a fiat-backed Euro stablecoin, “an e-money token” meant to bridge the gap between decentralized and traditional finance economies.
“The banking system today still largely runs on legacy rails. Money doesn’t flow in real-time. With the advent of stablecoins money became programmable, settling in seconds around the clock, and providing transparency into transaction ledgers.”
– Peter Grosskopf, Unstoppable Finance’s co-founder and CTO.
Grosskopf also reflected on how the recent banking turmoil affected and depegged Circle’s stablecoin USDC because the company keeps parts of its reserves in different bank accounts. In contrast, he claimed Unstoppable’s upcoming stablecoin would be fully backed by reserves, in line with the EU’s recently approved legislation.
He also said Unstoppable has a European Central Bank (ECB) account, where the DeFi firm tries to deposit “as much money as possible” as it believes fiat is still “the most stable form of money” today. “It’s guaranteed money, and that’s what we try to maximize,” he added.
EU’s Landmark Crypto Legislation Could Stimulate Sector Growth
Unstoppable’s announcement comes just weeks after the EU parliament approved the Markets in Crypto Assets (MiCA) – the most comprehensive crypto legislation seeking to regulate the nascent sector in the bloc’s 27 member countries.
While the MiCA bill was proposed after high-profile collapses that wiped billions of dollars off crypto investments last year, this landmark legislation is set to provide greater clarity and certainty for businesses operating in the crypto industry. Many believe that more legal clarity and market stability will encourage innovative crypto projects in the bloc.
But this is not the case in all global jurisdictions. For example, the regulatory environment in the US is not as encouraging at the moment as US regulators, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), continue to crack down on crypto firms, forcing them to seek growth elsewhere.
This article originally appeared on The Tokenist
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