Swiss Bankers Association proposes deposit tokens to develop digital economy

The Swiss Bankers Association released a achromatic insubstantial connected however Swiss banks tin enactment the improvement of the country’s integer economy. A Swiss franc “joint” deposit token is the solution the radical settled on. 

Stablecoins person constricted penetration successful the Swiss fiscal system, adjacent arsenic end-to-end digitization is becoming much communal successful concern models, and nary Swiss stablecoins are accessible by the wide public, the insubstantial said.

The authors of the insubstantial suggested that a assortment of stablecoin, that is, a deposit token “issued by regulated and adequately supervised intermediaries,” issued and redeemed by astute contracts and denominated successful Swiss Francs. The token could beryllium designed arsenic a ledger-based security, alternatively than a acceptable of instructions, to supply it with the top potential.

The insubstantial identifies 3 plan options for a deposit token. These are standardized tokens that immoderate commercialized slope tin contented with a azygous standard, colored tokens that are issued by commercialized banks to immoderate standards they take and associated tokens that are issued by a licensed and supervised peculiar intent conveyance consisting of participating banks. The authors similar the past choice.

A associated deposit token would facilitate wealth instauration owed to its flexibility, person debased fees and could gain involvement erstwhile held successful slope accounts. It would beryllium little liable to runs than tokens issued by idiosyncratic banks. Furthermore:

“From a method standpoint, each the economical and ineligible requirements that person been identified tin beryllium met. […] In principle, the DT should run connected a nationalist blockchain with further protocols to guarantee capable privateness and transaction efficiency.”

The token would ideally beryllium a furniture 2 solution usable successful decentralized concern (DeFi) applications and susceptible of self-custody oregon slope custody.

The Swiss Bankers Association (SBA) has published a achromatic insubstantial connected a integer Swiss franc, successful which it outlines assorted designs of tokenised deposits connected the blockchain https://t.co/SsPwziNRRm

— Central Bank Payments News (@cbpaymentsnews) March 14, 2023

Deposit tokens are a comparative newcomer to the ranks of integer currencies. According to a caller overview successful The Washington Post, they originated successful Project Guardian, an inaugural Monetary Authority of Singapore launched with respective fiscal institutions successful May 2022 that sought to research DeFi applications successful wholesale backing markets.

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JPMorgan bank, 1 of the participants successful Project Guardian, executed the archetypal DeFi trade connected a nationalist blockchain arsenic portion of that project. JPMorgan and task subordinate Oliver Wyman released a insubstantial discussing the merits of deposit token exertion successful February.