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 emerged as a haven for major banks and analysts.
The BaFin-regulated e-money institution 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 financial transactions.
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 compatible 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 milestone is just the start of a broader transformation in how global liquidity moves,” said.
The debut is a sign of growing investor demand for stablecoins pegged to fiat currencies beyond the US dollar. Last year, AllUnity debuted the EUR stablecoin, while several other firms have issued tokens pegged to other fiat currencies such as JPY.
The debut signals growing demand for stablecoins pegged to fiat currencies beyond the dollar. Last year, AllUnity launched its EUR-pegged token, joining others that have issued JPY-pegged alternatives. The stablecoin market has exploded since 2020, reaching $310 billion in total value with dollar-pegged tokens in pole position.
Safe harbor CHF
The outlook for CHF-linked assets looks bright as the currency is gaining recognition as a better safe haven currency than the very popular Japanese yen.
A safe haven currency is a stable, liquid currency that investors seek to hold during periods of economic uncertainty, political unrest or market volatility to protect their capital.
“If you’re a fiscal basket case, the markets weaken your currency and push up government bond yields. Japan and Switzerland are polar opposites: Japan is a basket case, Switzerland is a massive safe haven,” economist Robin Brooks said on X, echoing what Bannockburn Global Forex chief market strategist Marc Chandler told CoinDesk last year.
Investment banking giant Morgan Stanley has compared the Swiss franc to gold and is calling for a 17% rise against the US dollar.
“The CHF is an overlooked, undervalued safe haven that looks set to rise more significantly and faster than investors think and markets expect,” the bank said this week.
Goldman and Bank of America revealed a bias for the franc over the yen as a safe-haven currency last September.
