Robert Steinadler, 22 days ago
Banking is something that ought to become obsolete with the inception of Bitcoin. Bitcoin has evolved into what many believe is the only sound money on earth. On the other hand, financial products have been introduced on other blockchains, such as Ethereum. At the same time, banks might face competition from central banks looking extensively into central bank digital currencies (CBDC). Yesterday, a German company announced it would become the world’s first DeFi bank.
What are the plans of Unstoppable Finance, and is it even possible to follow through with this grand plan?
US banks are in a deep crisis, and others like Credit Suisse have also shown that global banking sector is at risk. These risks are not transparent. Most of the risks modern banks take are hidden in their balance sheets. Others, like the outstanding losses in the bond market, are not part of their reporting. This situation has led to rising costs for credit default swaps for many banks, and some analysts believe this could signal that the next big crisis is unraveling.
Unstoppable Finance wants to change that by empowering customers to hold their money in their digital wallets. A Euro stablecoin is also part of these plans that are supposed to serve as a bridge between crypto and a traditional banking account.
The new MiCA regulations that come into effect by next year should be the legal basis for this new venture. Therefore, it is still entirely in the dark when this new Fintech could start to open its business.
The company's managing partners are well-known in German and European banking. Peter Grosskopf is the founder and ex-CTO of Solarisbank and the former CTO and MD of Börse Stuttgart Digital Exchange. His co-founder, Maximilian von Wallenberg-Pachaly, served as CEO and MD at Börse Stuttgart Digital Exchange in the past and might also know a thing or two about banking and decentralized finance.
Their vast expertise in this field, but the young startup still faces legal struggles in Germany. Germany’s regulatory body BaFin stopped the company from spreading its app in Germany in late 2022. Unstoppable argues that it is just a wallet application, but BaFin believes the company facilitates financial services by making DeFi accessible.
The issue still needs to be solved, but a light version will launch next week in Germany without the functions that the BaFin disputes.
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