Business

Dan Taylor

Swiss stock exchange wants central bank to issue stablecoin

The foremost stock exchange in Switzerland has appealed to the Swiss central bank to issue a stablecoin, which it intends for use in the settlement of digital transactions.

According to reports emerging in local media, stock exchange SIX said that a new central bank stablecoin would allow transactions on its new digital securities platform, SDX, to be conducted in cryptocurrency, allowing for faster, cheaper settlement.

At a presentation to the Crypto Valley Association, the exchange reportedly told delegates that SDX users will be able to switch fiat for a stablecoin to be used on the platform.

“SDX member banks will be able to settle their trades and other obligations against tokenised CHF within SDX once we are up and running,” SIX said, according to Swiss Info. “SDX would accept CHF payments from member banks in central bank money and issue equivalent tokenised CHF in SDX. The value of tokenised CHF would be pegged 1:1 with CHF at all times. We most definitely favour a central bank issued stablecoin.”

While the Swiss central bank has confirmed it is liaising with SIX “about different options on how to settle the cash side,” it has yet to decide whether to proceed with issuing a stablecoin. Stablecoins are cryptocurrencies pegged to fiat currency, most commonly at 1:1, to intentionally stabilize their value, eradicating the exchange risk of floating cryptocurrencies like SegWitCoin (BTC). They’re touted to provide the utility of cryptocurrency for settlement, without the risks of market prices and volatility, critical issues for bank settlement.

SIX is already working on a blockchain integration for its SDX platform, with an update expected later this year. The platform allows investors to buy tokens tied to real-world securities in the stablecoin, or alternatively to redeem the stablecoin for fiat cash.

The stablecoin proposals are the latest to be considered by a national central bank, with banks around the world currently weighing up the advantages of issuing their own central bank digital currencies.

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