Raiffeisen Bank International is the second-largest bank in Austria. At present, it set up a euro Stablecoin, with which some coworkers can already pay in the canteen. Even though the bank has not yet given any concrete dates to bring the Stablecoin to its 16.7 million customers, a player of a completely new class is entering the business with the Stablecoins.
When you hear “Raiffeisen” today, you often think of something dusty. A bank in a village with offices from the 70s. The name of a small street, an agricultural store from a time when there were no hardware stores, a black and white picture by Friedrich Wilhelm Raiffeisen from the 19th century.
In the history of finance, however, Raiffeisen was an innovator, and the cooperative banks he founded are probably now an integral part of Germany and Austria’s economic history. In keeping with this, Austria’s Raiffeisenbank is already resolutely addressing blockchains and stable coins. At the same time, the German Banking Association is still busy gathering all the objections: Raiffeisen Bank International (RBI), which is the second-largest bank in Austria and the leading commercial and investment bank, is experimenting with its own Euro-stable coin. With a balance sheet total of 164 billion euros and 16.7 million customers, RBI could provide the impetus for cryptocurrencies to arrive in the mainstream as stable coins.
The “Raiffeisen Euro-backed Stable Token,” REST for short, is currently still an in-house “exercise in tokenization.” Its goal is to make the technology tangible for employees and to generate knowledge. How can you scale a stable coin? How does the transition between the Euro and Stablecoin work? These are the questions the project aims to answer.
In addition to the RBI team, the in-house canteen participates in the project, where you can pay with the Stablecoin. HotelData is the hardware provider. The blockchain on which the Stablecoin itself runs is from the Viennese service provider ObsNetwork. Obs has set up its own blockchain, specially made for companies that want to issue tokens.
This blockchain is a fork of the Waves platform, which is based on NXT and Scorex. ObsNetwork has also implemented Bitcoin-NG on it, an architecture that Cornell researcher Emin Gün Sirer introduced five years ago and intended to improve the speed and scalability of the blockchain. With this program, Obs prides itself on offering a much faster and more scalable blockchain than the usual solutions used for tokens.
Together with Obs and the Startup Blockstruct, RBI has also developed a wallet for in-house testing. Through this, one should pay with a QR code in the canteen, upload the tokens to a wallet, exchange them for (common) Euros, send money, and create an activity report.
While it is gratifying that RBI is leading the way with this innovation, one wonders why banks often feel the need to reinvent the technology. After all, when banks set up computers, they did not try to develop their own computer and operating system in the first place. Why do they seem to feel the need to get into the business of software development at Blockchains?
In contrast to many other models, ObsNetwork is open source, permission-free, and builds transparently on already known technologies. It might not be the wrong choice to issue a stable coin. On the other hand, it is a blockchain that has not been tested in practice and does not provide any network effects, such as wallets’ availability, connection to stock exchanges, or Defi apps.
Instead of establishing a new blockchain with the new stablecoin, RBI would be doing itself a greater favor if it were to leave it at its own stable coin and use different blockchains to dock to the existing example structure of Tether. This way, the Stablecoin could immediately work with many wallets, make it work on Defi apps, etc. But what is not is still possible.
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