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Investing.com -- German asset management firm DWS is uniquely placed to benefit from the rise of euro-denominated stablecoins, a market still in its infancy compared to the dominant U.S. dollar stablecoins, according to JPMorgan.
The bank highlights that the euro stablecoin market is valued at just €462 million, or 0.2% of its U.S. counterpart, but notes that “there are significant incentives for the EU to support local Euro stablecoin initiatives backed by reputable European financial institutions.”
DWS, together with Flow Traders and Galaxy, established the AllUnity joint venture, which launched Germany’s first fully reserved, MiCA-compliant euro stablecoin, EURAU, at the end of July.
By early September, EURAU had about €17.6 million in circulation, equivalent to 4% of the market, a small but notable start given Circle’s EURC controls more than 40% of the space.
JPMorgan points out that Circle benefits from synergies with its U.S. dollar coin, making it difficult for new entrants to compete without strong institutional backing and regulatory support.
JPMorgan sees two revenue streams for DWS: managing EURAU’s reserves and dividends from its one-third stake in AllUnity. While European regulation under MiCA requires significant portions of reserves to remain in bank deposits, limiting the scope for money market fund flows, DWS could still earn fees for collateral management, advisory services, and its share of joint venture profits.
More importantly, its stake in AllUnity could provide meaningful upside. JPMorgan estimates EURAU could add around 0.5% to DWS’s 2028 earnings, rising to as much as 1.5% in a more optimistic scenario.
DWS itself has stressed the long-term potential. Chief executive Stefan Hoops told analysts that revenues from AllUnity could be “tremendous” over the next five to ten years, though he cautioned it will take time for regulators and the market to mature.
The euro stablecoin market could expand rapidly if Europe aims to counter U.S. stablecoin dominance, JPMorgan analysts note, particularly given concerns about “digital stealth dollarization” and the risk to monetary sovereignty.
If euro stablecoins were to capture a larger share of the global market, DWS’s earnings benefit could climb toward 3–4% under a bullish scenario, the team said.
In JPMorgan’s view, credible institutional backing, regulatory approval, and the EU’s incentive to develop homegrown alternatives put DWS in the strongest position to capitalize on the euro stablecoin era.