AllUnity, a joint venture between DWS, Galaxy and Flow Traders, has expanded its stablecoin lineup with a new token pegged to the Swiss franc, which has become a safe-haven darling of major banks and analysts.
The electronic money institution regulated by Germany’s Federal Financial Supervisory Authority (BaFin) has launched CHFAU, backed 1:1 by Swiss franc reserves, to meet institutions’ needs for a regulated digital Swiss franc for payments, settlements and financial operations.
It debuted on the Ethereum blockchain as an ERC-20 token, with plans to expand to other networks later this year.
“To meet the strong demand for a compliant digital Swiss franc, we went from concept to launch in just a few months, demonstrating the strength and scalability of the AllUnity multi-currency platform,” AllUnity CEO Alexander Höptner said in a press release shared with CoinDesk.
“This milestone is just the beginning of a broader shift in the way liquidity flows around the world,” he said.
The debut signals growing investor demand for stablecoins pegged to fiat currencies other than the U.S. dollar. Last year, AllUnity launched a euro stablecoin, while several other companies have issued tokens pegged to other fiat currencies such as the Japanese yen.
Its debut marks a surge in demand for stablecoins pegged to fiat currencies other than the U.S. dollar. Last year, AllUnity launched a euro-pegged token, joining others issuing yen-pegged alternatives. The stablecoin market has exploded since 2020, reaching a total value of $310 billion, with U.S. dollar-pegged tokens dominating the market.
safe-haven Swiss franc
The future looks bright for Swiss franc-related assets, as the currency has gained notoriety as a better safe-haven currency than the popular Japanese yen.
A safe-haven currency is a stable, liquid currency that investors seek to hold to protect their capital during periods of economic uncertainty, political instability, or market volatility.
Economist Robin Brooks said on
Investment banking giant Morgan Stanley compared the Swiss franc to gold, calling for a 17% appreciation of the Swiss franc against the dollar.
“The Swiss franc is an overlooked, underappreciated safe-haven asset that appears set to appreciate more and faster than investors imagine and market expectations,” the bank said this week.
In September last year, Goldman Sachs and Bank of America revealed that the Swiss franc was preferred to the Japanese yen as a safe-haven currency.
