The CHFAU regulated token, backed at a 1:1 ratio by Swiss franc reserves, was introduced in response to institutional demand for a regulated digital CHF for payments, settlements and treasury operations, writes coindesk.com.
It will debut on the Ethereum blockchain as an ERC-20 token, with plans to expand to other networks later this year.
The debut signals growing investor demand for stablecoins pegged to fiat currencies other than the U.S. dollar. Last year, AllUnity introduced a EUR-stablecoin, while several other companies have issued tokens pegged to other fiat currencies such as the Japanese yen (JPY).
CHF safe harbor
The outlook for assets pegged to the Swiss franc looks optimistic, as the currency is gaining a reputation as a better safe haven currency compared to the widely popular Japanese yen.
A safe haven is a stable, liquid currency that investors seek to hold in times of economic uncertainty, political turmoil or market volatility to protect their capital.
“Japan and Switzerland are polar opposites: Japan is a financial nightmare, Switzerland is a major safe haven,” economist Robin Brooks wrote on social media X.
Investment banking giant Morgan Stanley compared the Swiss franc to gold, predicting it would rise 17% against the US dollar.
“CHF is an undervalued, under-recognized safe haven asset that the bank believes is poised for more substantial and rapid growth than investors and markets anticipate,” the bank said this week.
