According to PANews, the collapse of Swiss bank FlowBank, valued at $781 million, is causing a ripple effect in the cryptocurrency industry and threatening the existence of the AEUR stablecoin. The Swiss company Anchored Coins AG, which issues the euro-pegged AEUR stablecoin, had deposited part of its $63 million euro stablecoin reserves in the troubled bank. The company has announced on its website that it has suspended the issuance and redemption of its tokens until further notice and has also stopped accepting new customers.

Anchored Coins stated, 'Due to the early stage of FlowBank SA's liquidation-related bankruptcy proceedings, it is unclear how much of our collateral can be recovered. Therefore, if there is a shortfall, the 1:1 redemption rate may not be maintained, resulting in corresponding losses for AEUR token holders.' The company further mentioned, 'According to Swiss law, such losses will be proportionally distributed among all AEUR token holders.'

These deposits provided a backup redemption guarantee for its stablecoin holders in case Anchored Coins itself could not fulfill its obligation to exchange user tokens for fiat currency. With FlowBank entering liquidation, these funds are in an uncertain state until Swiss authorities appoint a liquidator to oversee the return of deposits to creditors, which could take some time. Anchored AG cannot guarantee the recovery of all deposits from the affected bank, potentially leading to losses for stablecoin holders.

Previously, on June 13, Swiss regulators closed the cryptocurrency-related bank FlowBank and initiated bankruptcy proceedings.