AllUnity, a joint venture between DWS, Galaxy and Flow Traders, has expanded its range of stablecoins with a new token pegged to the Swiss franc, which has become a cherished haven for big banks and analysts.
The BaFin-regulated electronic money institute has unveiled CHFAU, which is backed 1:1 by Swiss franc reserves, in response to institutional demand for regulated digital CHF for payments, settlements and treasury operations.
It is debuting on the Ethereum blockchain as an ERC-20 token, with plans to expand to other networks later this year.
“In response to strong demand for a compliant digital Swiss franc, we went from concept to launch in a matter of months, demonstrating the strength and scalability of AllUnity’s multi-currency platform,” said Alexander Höptner, CEO of AllUnity, in a press release shared with CoinDesk.
“This step is just the beginning of a broader transformation in the way global liquidity evolves,” said.
The debut is a sign of growing investor demand for stablecoins linked to fiat currencies beyond the US dollar. Last year, AllUnity launched EUR-stablecoin, while several other companies have issued tokens pegged to other fiat currencies such as JPY.
These debuts signal growing demand for stablecoins tied to fiat currencies beyond the dollar. Last year, AllUnity launched its EUR-pegged token, joining others who have issued JPY-pegged alternatives. The stablecoin market has exploded since 2020, reaching $310 billion in combined value, with dollar-pegged tokens in pole position.
Safe haven CHF
The outlook for CHF-linked assets looks bright as the currency gains 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 during times of economic uncertainty, political unrest, or market volatility to protect their capital.
“If you’re in a fiscal basket case, markets are weakening your currency and pushing up government bond yields. Japan and Switzerland are polar opposites: Japan is a basket case, Switzerland is a huge safe haven,” economist Robin Brooks told X, echoing what Bannockburn Global Forex chief market strategist Marc Chandler told CoinDesk last year.
Investment banking giant Morgan Stanley compared the Swiss franc to gold, calling for a 17% appreciation against the US dollar.
“The CHF is a neglected and undervalued safe haven asset that appears set to appreciate more substantially and faster than investors think and markets anticipate,” the bank said this week.
Goldman and Bank of America revealed a bias toward the franc over the yen as a safe-haven currency in September last year.
