TechFlow reports that the collapse of Swiss bank FlowBank is threatening the viability of AEUR, a euro-pegged stablecoin. Anchored Coins AG, the issuer of AEUR, had deposited part of its reserves with the troubled FlowBank. As a result, Anchored Coins has suspended issuance and redemption of AEUR and stopped accepting new clients.
Anchored Coins stated that since the liquidation process of FlowBank is still in its early stages, it is currently unable to determine the extent to which collateral can be recovered. If reserve shortfalls occur, AEUR may fail to maintain its 1:1 redemption rate, potentially causing losses for token holders. Under Swiss law, such losses would be proportionally distributed among all AEUR holders.
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