Europe’s First Compliant DeFi Bank and Stablecoin: Unstoppable Finance Embraces MiCA Rules

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The recent passing of the European Union’s Markets in Crypto Assets (MiCA) bill has brought comprehensive crypto legislation to the forefront for the bloc’s 27 member states. In response, Berlin-based fintech startup Unstoppable Finance is gearing up to introduce Europe’s first compliant “DeFi-native bank” and a fiat-backed Euro-pegged stablecoin in accordance with MiCA’s guidelines.

The team behind Unstoppable Finance boasts a strong background in crypto and fintech innovation. Co-founder and CTO Peter Grosskopf, along with Maximillian von Wallenberg-Pachaly and Omid Aladini, previously launched Börse Stuttgart Digital Exchange (BSDEX), Germany’s first regulated crypto exchange. In 2021, they founded Unstoppable Finance, known for its Ultimate DeFi wallet that allows users to interact with Ethereum and Solana protocols, self-custody assets, and trade crypto from their mobile devices.

As part of the new DeFi banking initiative, Unstoppable Finance is committed to ensuring that its Euro-pegged stablecoin is fully backed by reserves, as mandated by MiCA. Grosskopf highlights the liquidity crises that recently plagued Silicon Valley Bank, Signature Bank, Silvergate, and Credit Suisse, causing Circle’s native stablecoin USDC to be briefly depegged. This incident underscores the importance of adhering to regulatory guidelines for stablecoin backing.

Unstoppable Finance’s DeFi bank intends to deposit money in an European Central Bank (ECB) account to ensure that funds are secure and accessible. Grosskopf believes this approach will maximize the stablecoin’s value by leaning on the stability of fiat currency instead of relying on the risk management of conventional banks.

The company’s stablecoin falls under the legal classification of “e-money token,” which applies to blockchain-based stablecoins that derive their value from the fiat currency they reference. Grosskopf confirmed that Unstoppable Finance aims to align itself with the EU’s new regulations, citing his experience as part of the founding team and CTO of Solarisbank, the first tech company to obtain a German digital banking license seven years ago.

While it remains unclear when Unstoppable Finance plans to launch the DeFi-native bank, a spokesperson for the company stated that it would depend on the speed at which they can secure the necessary licenses. The introduction of this DeFi bank and Euro-pegged stablecoin epitomizes the growing adoption of crypto and the readiness of the fintech industry to adapt to emerging regulations, fostering a more secure and trusting environment for the blockchain future.

Source: Decrypt

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