“The digital franc is coming – the only question is, who will issue it?”

Many people still see stablecoins as a niche area of cryptocurrency. Why should banking decision-makers be considering them now?

Behind the buzzword, a new settlement infrastructure is developing – and at an astonishing speed. The global stablecoin market exceeds $300 billion. Over 99 % of it is linked to U.S. dollars. Today’s market is effectively a dollar-based infrastructure. The wholesale sector is primarily driving growth – that is to say, transactions between financial institutions, rather than end-customer payments. This involves areas such as settlement (the final step in a transaction) and how collateral is managed. But it also involves creating digital tokens that represent real-world assets, such as real estate or bonds, on a blockchain. We call this “tokenization.” Only a very small number of everyday transactions currently use stablecoins. But that is precisely the point. Stablecoins will not change how we pay at the checkout. Instead, they will transform the underlying architecture. This concerns issues such as settlement finality (when a transaction is complete and can no longer be revoked) and liquidity lockup (how long capital is tied to a transaction). In addition, it is also important for allocating risks within the financial system. These factors affect a bank’s cost base and strategic flexibility, even if it doesn’t issue stablecoins itself. This represents a structural change – it’s not just hype.

How do you see stablecoins within the digital monetary system?

I see a digital money trinity. Instead of having a single standard, the digital monetary system is evolving toward three complementary layers. Stablecoins offer speed, global reach, and programmability for domestic and international payments. For tokenized real-world assets, they also act as the “cash leg” – that is to say, they form the cash component of a transaction. Deposit tokens are tokenized bank deposits. They represent traditional deposits digitally on a blockchain. They will remain closely embedded in existing banking processes and the current regulations. This means that deposit tokens are primarily a solution for security and scalability for financial institutions. The wholesale Central Bank Digital Currency (CBDC) is an initiative of the Swiss National Bank (SNB), and it is driving digitalization in the interbank sector. The crucial point is this: We have a two-tier banking system: The SNB issues money to banks, and the banks pass it on to customers. This means that private individuals will not be able to exchange deposit tokens with each other. The CHF stablecoin is therefore the only component of this trinity that is programmable and open for everyone to use.

Why does Switzerland need its own CHF stablecoin?

For me, this is above all a question of digital sovereignty. Having a USD-pegged stablecoin as the standard in Switzerland is not an option. I see three specific needs that our current infrastructure does not fulfill: 1) a CHF cash leg for trading and transferring tokenized assets; 2) instant global payments at a low cost; and 3) being able to hold Swiss francs as a stable investment without a bank account. This third point is perhaps the biggest lever from a global perspective. Many people across the world see the Swiss franc as very safe, but you need a Swiss bank account in order to hold Swiss francs. Access is therefore very limited outside Switzerland. A regulated CHF-pegged stablecoin would remove this obstacle. Savers in Argentina, Turkey, or Nigeria could hold Swiss francs directly, without an intermediary. That’s Private Banking 2.0. I believe that people will not use a CHF stablecoin as a payment method in the traditional sense. Instead, a CHF stablecoin will provide a new infrastructure for the Swiss financial center. People can trade tokenized assets at any time of day or night, unlike fiat currency. A regulated CHF stablecoin closes this gap and allows “atomic settlement” – simultaneously and finally transferring an asset and settling payment. In the retail sector, the lower transaction costs, international reach, and programmability could pose a long-term challenge to existing market players. For this to become a reality, stablecoins need to be widely adopted. In addition, people will need easy access via online banking and digital wallets, as well as secure reserves. And the stablecoin issuer will need a viable business model.

How will the AI megatrend affect the future of stablecoins?

AI agents may become the biggest users of stablecoins in the future. This is because programmable payments fit seamlessly into their autonomous workflows. For humans, today’s payment systems generally work well. They may be expensive, and slow for international payments, but this isn’t usually an issue as the merchants bear most of the costs. However, for AI agents that independently initiate microtransactions and machine-to-machine payments, stablecoins are the natural payment method: always available, programmable, and with no manual steps required. In a world where autonomous agents process millions of transactions, the legacy banking system is simply not an option.

Who will issue the CHF stablecoin, and what are the main obstacles?

This crucial question remains unanswered. There are several contenders: a major bank, a consortium, a foreign institution, or Pascale Bruderer’s current initiative with Swiss Stablecoin AG. Leading Swiss banks – including UBS, Raiffeisen, Postfinance, ZKB, BCV, and the crypto bank Sygnum – are working with Swiss Stablecoin AG to implement a sandbox project for a CHF stablecoin. That sends an important signal: For the first time, the largest financial institutions are joining forces to support a digital Swiss franc. However, I’m not convinced that this initiative will ultimately lead to a productive offering. Let’s be honest: Swiss banks should be worried about the prospect of a CHF stablecoin. It threatens their margins on international payments. A CHF stablecoin would compete with existing payment solutions. Plus, if customers start withdrawing their deposits, that could reduce the funds available for lending. There are still many structural obstacles to a bank acting as an issuer: On the one hand, policymakers might require the issuer to be a separate entity. On the other hand, the capital requirements have still not been clarified. Plus, it’s unclear how much revenue the issuer could generate from a stablecoin with the current low interest rates. In reality, a CHF stablecoin will come from the private sector. Hopefully, the financial industry and major retailers will collaborate closely to bring it about. Those who earn trust early will shape the market.

Switzerland is revising the Federal Act on Financial Institutions (FINIG), and the consultation has ended. Does the proposal create the right framework for stablecoins?

Regulatory hurdles in Switzerland are high, and the timeline is long. We don’t expect to see any legislative changes before 2027 at the earliest. The proposal is an essential first step. But officials call the stablecoin a “value-stable crypto-based means of payment.” That complicated name gives you an idea of the numerous hurdles that still exist: A regulatory framework that works in practice is still a long way off. For example, everyone agrees on the ban on interest: Stablecoins should not earn interest. But does that really make economic sense? Already, about 30 % of all stablecoins worldwide are effectively earning interest through DeFi lending protocols. The ban doesn’t prevent anything; it just shifts the problem. More importantly, regulation needs to lay the foundations for innovative business models rather than hampering them. As I mentioned earlier, the Swiss franc has been more stable than the dollar and the euro for decades. If people worldwide could access the Swiss franc in the form of stablecoins, it would create a strategic asset for the Swiss financial center. Today, private banking is only an option for a very small group of people. A tokenized CHF could open it up to millions. Regulation must not stand in the way of this opportunity. I therefore hope that the regulations will be streamlined and designed to get through a referendum.

What do you personally want to see change?

Let’s think bigger and act with courage. I’m convinced that Switzerland can play a leading role in digital currency – but only if we combine vision with pragmatism. A CHF stablecoin is not just an issue for Swiss retail. It is a vision for the financial center: It would open up Private Banking 2.0 to a global clientele. It would create a cash leg for tokenized markets. And it would take the values that have defined Switzerland for decades – stability, trust, and quality – and extend them into the digital world. If we wait too long, there’s a risk that big tech or a foreign issuer will impose the infrastructure on us. Switzerland has the talent, the regulatory expertise, and the reputation. All that’s missing is determination. What we need now is the courage to take the first step and the willingness to learn along the way.