The Swiss Bankers Association (SBVg) has presented a new in-depth paper addressing the development of a Swiss franc stablecoin, outlining specific political demands alongside the associated opportunities and risks for the Swiss financial center. Chief Economist Martin Hess and Senior Legal Counsel Natalie Graf introduced the publication during a media event in Zurich, drawing a parallel between historical travelers' cheques and today's digital, programmable blockchain-based payment principles.
Stablecoins represent digital payment instruments whose value is pegged to a reference currency and backed by reserves. The SBVg identifies potential primarily within cross-border transactions, which could be executed without requiring multiple intermediary correspondent banks, thereby allowing international corporations to manage their liquidity more efficiently. Additional application areas include tokenized assets and automated business processes, such as payments along a supply chain that are autonomously triggered via smart contracts.
Regarding commercial potential, the initiative could generate new revenue sources for banks. Given the current low interest rate environment in Switzerland, the actual issuance of a stablecoin is unlikely to yield substantial direct profits, but transaction, custody, currency exchange, and conversion fees present more attractive prospects. Hess emphasized that the point of no return has been reached internationally, noting that the United States and the European Union already possess specific regulatory frameworks while Switzerland is still working on its own legal rules. The market dynamics are underscored by developments such as Allunity, a German-regulated enterprise that launched a Swiss-franc-pegged stablecoin named CHFAU in February 2026.
The banking association urges the establishment of competitive regulatory conditions for domestic issuance to ensure Swiss authorities can directly supervise providers, enforce legal claims more easily, and retain technological know-how and value creation within the country. However, the technology also entails risks. If customers shift substantial balances from traditional bank accounts into stablecoins, it could constrain the refinancing of loans and mortgages, given that Swiss banks rely heavily on customer deposits.
To categorize potential systemic impacts, the SBVg outlines distinct volume thresholds within its paper. Up to an issuance volume of 500 million francs, existing supervisory structures are deemed sufficient. Volumes exceeding 5 billion francs could elevate a stablecoin into a significant component of the financial infrastructure, while roughly 20 billion francs would necessitate comprehensive institutional integration. These figures represent association estimates rather than legally binding thresholds. Additional challenges stem from the status of the Swiss franc as a safe haven asset, which could trigger surges in demand during crises, accompanied by the risk of a stablecoin run if numerous holders simultaneously demand redemptions and pressure issuer reserves.
The Swiss Federal Council plans to establish a specific legal framework through a revision of the Financial Institutions Act. While the SBVg welcomes this step broadly, it advocates for specific modifications. Graf criticized a provision in the preliminary draft that would require banks to establish a separate subsidiary licensed as a payment institution to issue stablecoins, arguing that regulation must remain practical and that banks should be permitted to issue stablecoins directly under their existing banking licenses. Furthermore, the association requests greater flexibility regarding reserve composition, noting that the domestic capital market offers limited short-term, highly liquid assets that could otherwise hinder viable business models.
On anti-money laundering measures, the association favors internationally coordinated rules, contrasting the existing Swiss supervisory approach that generally mandates the identification of all stablecoin holders by issuers or supervised financial intermediaries with the draft's risk-based solution.
Prakctical applications are already under evaluation through a test phase initiated in September within a protected digital environment, known as the stablecoin sandbox. The collaborative initiative involves UBS, Postfinance, Sygnum, Raiffeisen, Zürcher Kantonalbank, Banque Cantonale Vaudoise, SIX, Twint, and Swiss Stablecoin, with results scheduled for release in December.
