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Switzerland has long sought financial stability, including neutral safe havens, sound funds and vaults. Now, the company wants to preserve that reputation in digital form.
The government has opened talks to allow the issuance of stablecoins in the country, a step towards a future where trust in Swiss authenticity can be expressed not only in numbered accounts but also in blockchain tokens.
The proposal outlines new licensing categories for “payment institutions” and “cryptocurrency institutions” that would subject stablecoin issuers to Swiss financial law. It may sound bland, but its implications are significant. Can Switzerland transfer its brand of financial legitimacy to the world of cryptocurrencies, and will it strengthen or weaken the traditional banking model?
Stablecoins are digital tokens pegged to traditional currencies such as the dollar or franc, and are designed to provide the speed of cryptocurrency payments without the volatility of Bitcoin. They are considered a bridge between traditional finance and the blockchain economy.
Switzerland qualifies as a reliable stablecoin anchor. Aside from the Credit Suisse collapse that tarnished the country’s reputation in 2023, the country’s financial institutions are stable, its regulators are pragmatic, and its currency is seen as the most trusted on the planet. The Swiss Franc-pegged token is transparent and fully backed and supervised by regulator Finma, which could set it apart from the sloppy experimentation that has tainted the sector elsewhere.
Franc-based stablecoins could also become attractive to users seeking an alternative to the dollar’s dominance in crypto payments. The franc’s haven status could attract investors seeking digital liquidity unfettered by U.S. monetary policy or the reputation of offshore issuers.
Switzerland’s timing is intentional. Regulators in Europe, the US and Asia are already grappling with how to police stablecoins, with mixed results in some cases. In contrast, Switzerland took longer. The proposal draws some clear lines. Coins issued domestically require a license with reserve and disclosure requirements. Foreign coins that are only traded domestically are treated as crypto assets and not as legal payment tokens. Although offshore issuers are not forced to transfer or duplicate reserves, Swiss-issued coins are still closely supervised by Finma.
Some argue that Switzerland’s deliberate pace has hurt momentum. Once touted as the “crypto nation,” the country now faces stiff competition from fast-moving hubs such as Singapore, Hong Kong and Dubai keen to court global digital asset companies.
“Switzerland has taken time to learn lessons from countries such as the EU and the US,” said Dia Markova, policy director at crypto firm Fireblocks. She says the move could be transformative. “The game changer for Switzerland is going to be building a market for tokenized assets and bonds. To capture that market, you need tokenized money, or cash on chain, and that’s what this framework is really about.”
Honey Rashwan, founder of Switzerland-based crypto ETF company 21shares, argues that stablecoins have the potential to “support the strength of the Swiss franc, its stability and sovereignty.”
Law firm Baer & Coller notes that the city of Bern will also remove the CHF100 million cap on customer funds that licensed fintech companies can hold, a change aimed at allowing these institutions to “take advantage of economies of scale”. Simply put, this is a clear signal that new digital money providers intend to grow, even if it means increased competition for banks.
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But success comes with irony. The more convincing the Swiss stablecoin story becomes, the greater the threat to the system it is based on. In a world where digital francs can be moved around the world with the click of a button, the need for Swiss bank accounts and even Swiss intermediaries will be reduced. Why park your money in an Alpine country when you can hold it in the same currency from your own wallet?The risk for Swiss banks is not that stablecoins fail, but that they work too well.
Even so, the balance is delicate. Too much freedom risks exposing Switzerland to reputational headwinds. Too much management and innovation will move you elsewhere. The consultation will run until February, and while the bill is unlikely to be passed before late 2026, it will give the city of Bern time to design something orderly, transparent, but not stuffy and typical of Switzerland (as startups will hope).
The bigger question is a philosophical one. Can Switzerland recreate its signature product, trust, in an age that thrives on code and decentralization? If successful, its financial relevance could extend into the digital age as well. One wrong move and the country’s core industries face the risk of being weakened by a world of tokenized competition.
mercedes.ruehl@ft.com
