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10 Themes - #3: Stablecoins have the potential to transform the payment infrastructure

10 Themes
Crypto currencies
Digitalization
Technology

06/10/2025

Regulated euro stable coins set the standard for efficiency, liquidity and institutional acceptance

Theme 3 CIO Special DE

In recent years, stablecoins have evolved from a niche product into a vital component of the digital financial landscape. With a market capitalization exceeding USD 250bn and transaction volumes surpassing those of Visa and Mastercard combined, stablecoins have long transcended their role as a tool for crypto traders. Notably, stablecoins such as USDT (Tether) and USDC (USD Coin) have become liquid, globally tradable and price-stable instruments. These characteristics make them increasingly attractive to private and institutional investors.

Stablecoins' appeal lies in their function as a bridge between the traditional financial world and the blockchain economy. They provide fast and cost-effective access to global markets around the clock, eliminating the need for intermediaries. For investors this potentially leads to high liquidity, tight spreads and ease of trading, which is particularly relevant in periods of market volatility.

Regulation is a key factor in the growing acceptance of stablecoins. With the introduction of MiCAR (Markets in Crypto-Assets Regulation), the EU has established a transparent legal framework intended to foster confidence among institutional investors and retail customers alike. Against this background, AllUnity developed its EURAU euro stablecoin. It is fully regulated, backed one-to-one by euros and subject to financial supervision by the German financial regulator BaFin. This offers investors greater transparency and protection from regulatory risks, as well as providing a reliable alternative to other unregulated stablecoins.

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Both transaction volumes and market capitalization are growing substantially and in tandem

 

Sources: Artemis Terminal, CoinMarketCap, DWS Investment GmbH as of 8/1/25.  

This information is subject to change at any time, based upon economic, market and other considerations and should not be construed as a recommendation. Past performance is not indicative of future returns. Alternative investments may be speculative and involve significant risks including illiquidity, heightened potential for loss and lack of transparency. Alternatives are not suitable for all clients. Source: DWS Investment GmbH.

However, regulation alone cannot account for the success of stablecoins. Liquidity is also a key factor that influences price stability and scalability, which can be measured via central exchanges, decentralized platforms and cross-chain solutions. For investors, liquidity is a measure of market quality and an indicator of potential returns. After all, one may only take advantage of opportunities when quick and efficient action is feasible to begin with.

Another driver is the increasing interoperability. Stablecoins are being integrated into an increasing number of banks, treasury systems, and B2B payment processes. Connecting blockchain infrastructures to traditional payment systems creates new opportunities, including mass payments, automated settlements, and integration to digital business models. These new ecosystems may have significant upside potential as they generate network effects for investors.

Of course, there are still risks, such as liquidity bottlenecks and the possibility of regulatory intervention. This is where regulated stablecoins, such as EURAU, come in, offering new perspectives that we believe may be of particular interest to more risk-averse investors.

“Stablecoins exemplify the transformation of the financial system by combining stability with innovation, as well as efficiency with security,” says Alexander Bechtel, Global Head of Digital Strategy, Products and Solutions at DWS. “They are opening up new ways for investors to participate in the digital transformation.” Although stablecoins currently have limited use cases, we see a good chance they will appear in many more areas in the future — some of which are undoubtedly beyond our current imagination.

 

CIO Special_Theme 3 - Digital Assets

Miscellaneous Oct 2025

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