AllUnity, a joint venture between DWS, Galaxy and Flow Traders, has expanded its line of stablecoins with a new token pegged to the Swiss franc, which has become a favorite haven for major banks and analysts.
Regulated e-money institute BaFin has introduced 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 debuts 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 moved 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 beginning of a broader transformation in how global liquidity moves,” he said.
The debut is a sign of growing investor demand for stablecoins pegged to fiat currencies beyond the US dollar. Last year, AllUnity introduced the EUR stablecoin, while several other companies issued tokens pegged to other fiat currencies such as JPY.
The debut indicates 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 skyrocketed since 2020, reaching a combined value of $310 billion, with dollar-pegged tokens in the top position.
CHF Safe Haven
The outlook for CHF-linked assets appears bright, as the currency is gaining notoriety as a better safe-haven currency than the highly popular Japanese yen.
A safe haven currency is a liquid, stable currency that investors seek to hold during periods of economic uncertainty, political unrest, or market volatility to protect their capital.
“If it’s a fiscal basket case, markets weaken their currency and raise 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 Marc Chandler, chief market strategist at Bannockburn Global Forex, told CoinDesk last year.
Investment banking giant Morgan Stanley has compared the Swiss franc to gold and calls for a 17% appreciation against the US dollar.
“CHF is an overlooked and underappreciated safe haven asset, and it looks set to appreciate more substantially and quickly than investors think and markets anticipate,” the bank said this week.
Goldman and Bank of America revealed a preference for the franc over the yen as a safe haven currency in September last year.
