Zurich - Switzerland's financial system is preparing for a global shift in digital payments. The country's largest banks, including giants UBS and PostFinance, have begun practical trials of a government-backed stablecoin pegged to the national currency, the Swiss franc (CHF).
The project, overseen by the Swiss National Bank (SNB), aims to create a fundamentally new instrument for domestic and cross-border settlements. If successful, the banks plan to launch the digital currency into commercial operation as early as 2027.
To avoid the risks typical of the volatile crypto market, the banks will operate within a special regulatory "sandbox" until the end of 2026. This will allow financial institutions to gain necessary experience with digital money without endangering the core financial system.
This is not Switzerland's first experience with tokenization. Previously, three banks successfully tested a so-called deposit token on the Ethereum blockchain. Those trials involved transfers between organizations and individuals, as well as mechanisms for exchanging tokens for real assets (asset tokenization).
Private stablecoins pegged to the Swiss franc already exist on the market, such as Frankencoin (ZCHF). However, the new project differs fundamentally. It could become Europe's first fully regulated stable token, issued with the support of the state and major systemically important banks.
The Swiss franc has long been considered one of the world's most stable currencies, forming an integral part of a "safe haven" for investors. Backing a digital token with such a reliable asset could make it attractive not only to retail clients but also to institutional players seeking a reliable settlement environment without slippage.
For Switzerland as a global financial center, creating its own digital franc addresses several key challenges:
1. Settlement efficiency - Reducing costs and time for cross-border transfers.
2. Control - The state retains control over issuance, unlike decentralized cryptocurrencies.
3. Bridge between tradition and innovation – Banks can leverage blockchain benefits (transparency, speed) while remaining within the familiar legal framework of the Swiss franc.
The success of this experiment could serve as a model for central banks in other countries that are still studying the idea of creating their own central bank digital currencies (CBDCs). While Europe debates the digital euro, Switzerland is already testing a real competitor, pegged to a traditional currency.