Stablecoins have made quite a splash in the industry and while the dollar-pegged coins might get a bulk of the attention, there are several stablecoins that are pegged to other fiat currencies.
Could you tell us a bit about Swiss Crypto Tokens and the CryptoFranc?
Swiss Crypto Tokens, a subsidiary of Bitcoin Suisse AG founded in 2018, is the issuer of the CryptoFranc (XCHF) stablecoin, which is pegged to the Swiss Franc. All CryptoFrancs are fully backed by physical Swiss Franc banknotes, which are audited by Grant Thornton Bank Audit Ltd on a monthly basis. We have already issued 12 million units of the stablecoin, all of which have been purchased.
Why are we seeing a rising interest in stablecoins?
The familiarity and sense of security associated with stablecoins is proving to be an attractive proposition for institutional investors, providing an access point for them to explore the crypto realm with confidence. This category of investor, once dissuaded from market participation due to volatility issues, are now feeling more at home dealing with stablecoins backed by fiat currencies.
Why do you think the Swiss Franc needs a stablecoin equivalent?
As part of Switzerland’s fully-fledged embrace of blockchain technology and digital assets, the jurisdiction needs a robust, trusted stablecoin. We’ve seen the emergence of stablecoins backed by other fiat currencies, and given Switzerland’s prominent role in the global crypto ecosystem, the Swiss Franc should be no different. The region is consistently taking steps to introduce blockchain and crypto in mainstream Swiss life, with leading Swiss online retailer Digitec Galaxus recently announcing that it will now accept cryptocurrencies. The rise of the CryptoFranc represents another step in this ongoing journey. Having a stablecoin backed by the Swiss Franc allows for individuals to enter the crypto market and engage with our thriving Crypto Valley community.
Why is the Swiss Franc a reliable asset to base a stablecoin on?
Leveraging the stability and status of the Swiss Franc into the digital assets realm will boost the credibility of the space, while helping to attract new market participants, investors, businesses and consumers. The Swiss Franc is deeply rooted in the Swiss financial sector which manages around 27.5% of all global cross-border assets.
Is it true that stablecoins can lead to less market volatility more than other cryptocurrencies?
Stablecoins represent a bridge between institutional investors and the evolving crypto ecosystem. This stability is not only a result of the real world assets which back these coins, but also how these financial instruments behave in the crypto market. Previously when exchanging assets, participants would have to wait for transactions to leave the crypto market and be converted back to fiat currencies, which can take a significant amount of time and result in price changes while the transaction is in process. This fear of engaging with the crypto market based on perceived volatility is addressed through stablecoins.
Why is transparency so important to Swiss Crypto Tokens?
Swiss Crypto Tokens is committed to ensuring the highest levels of transparency and trust in our offering. We are audited on a monthly basis by Grant Thornton Bank Audit Ltd., an industry-leading audit firm, and each report is publicly available. The crypto industry, in general, has to regain trust and therefore the setup we developed had to be 100% solid, trustworthy and future proof.
If executed in the correct manner, with strict adherence to regulatory processes and full transparency pertaining to the underlying assets, stablecoins can open up clear entry points into the industry for new cohorts of investors who have shied away from the market due to volatility issues.
Everything from artwork to real estate is now being tokenized. Where do you think we will go from there?
The tokenization of assets is a movement of inclusivity, opening up new pathways for individuals to participate in capital markets. The tokenization of artwork, for example, can make investments in art more accessible to the world. Fractionalized ownership of premiere assets is a showcase example of how blockchain technology can be harnessed to empower citizens and bring real innovation to antiquated processes and standards.