The Stablecoins offer opportunities – and present challenges for the Swiss financial centre

Stablecoins are payment and store-of-value instruments based on distributed ledger technology (DLT) that aim to maintain a stable value relative to an asset, such as the Swiss franc. In an increasingly digitalised economy, stablecoins offer the potential for programmable financial flows and innovative applications – for example, in payment transactions, the trading of digital assets, or decentralised financial services. They could contribute to lowering transaction costs, speeding up payments and enabling new business models.

The report concludes that regulated and supervised banks are particularly well positioned to issue stablecoins, acting as trusted financial intermediaries. This would not only enhance the stability of stablecoins and increase user trust but would also allow banks to actively shape the evolving blockchain-based financial economy and open up new areas of application. "At the same time, the risk to the domestic financial system that a stablecoin not denominated in Swiss francs and issued abroad would gain widespread use could be reduced."

“Stablecoins are more than just a technical means of payment – they could play a strategic role for the financial economy and the state in a modern monetary system,” notes Dr. Martin Hess, Chief Economist at the SBA and project lead for the report. “However, this requires that the numerous risks associated with issuance are comprehensively addressed.”

The report’s authors – experts from the SBA and its member banks – highlight the challenges and risks associated with stablecoins: ensuring the value stability of a stablecoin, safeguarding financial market stability, and particularly the risk of disintermediation. A significant shift of bank deposits into stablecoins could impair banks’ ability to extend credit and thus hinder the effective functioning of the financial system and the development of the economy.

High-quality, liquid backing and issuance by regulated institutions are therefore essential prerequisites to create a stable and trusted Swiss franc stablecoin – and enable broad acceptance.

The expert report “Stablecoins in Switzerland – An Overview of the Opportunities and Risks of Stablecoins Issued by Swiss Banks” does not take a position on whether Swiss banks should issue stablecoins. It forms part of the SBA’s ongoing work on future forms of money.

The study is available in German, French and English.