Swiss Banks Join Forces on Franc-Based Stablecoin Project

The “CHF stablecoin sandbox” — a reference to the currency code for the Swiss franc — will examine ways to connect blockchain applications with the fiat currency, the banks said in announcing the project Wednesday (April 8). The banks involved in the project are UBS, PostFinance, Sygnum, Raiffeisen, ZKB and BCV.

“The participating companies are pursuing several overarching goals with this initiative,” UBS said in the announcement.

“They aim to support the development of a Swiss ecosystem for digital money, build new capabilities and experience in handling digital payment methods, and gain practical insights. The focus is on more efficient processes and delivering real benefits for clients.”

UBS said the sandbox will be conducted this year and is open to other banks, companies and institutions that want to help develop a CHF stablecoin.

The project follows a push by banks such as BBVA to launch a euro-pegged stablecoin. As PYMNTS wrote soon after that, these efforts make it clear that “there will be no one-size-fits-all bank stablecoin.”

Rather, the market is divided along functional lines, with tokens designed for various uses like interbank settlement, asset servicing, corporate treasury or cross-border trade.

“We don’t start with the asset,” Biswarup Chatterjee, global head of partnerships and innovation, Citi Services at Citi, told PYMNTS. “We typically start with our client need, and then we look at the pros and cons of each type of asset or financing instrument.”

Meanwhile, research by PYMNTS Intelligence finds that businesses that want to explore stablecoins are increasingly interested in going through banks rather than crypto-native wallets or FinTech intermediaries.

“Trust in the channel, it turns out, matters for finance chiefs, and banks offer familiar controls, integrated reporting and compliance guardrails that plug into existing treasury workflows,” PYMNTS wrote last month.

“Crypto-native wallets, while efficient, introduce unfamiliar risks: private key management, fragmented reporting, uncertain custody standards and evolving regulatory interpretations.”

Banks on the other hand can offer a layer of trust that finance chiefs already understand, as well as established custody frameworks, standardized reporting and compliance processes that align with company’s audit requirements.

“When stablecoins are accessed through a bank, they are effectively wrapped in the institutional safeguards that finance teams depend on,” the report added.