Approaching a CHF sablecoin on ICP

[ishaaqziyan]

GM!
I am Ishaaq from ICP Pulse.

This is an important statement I saw in CT from a DeFi Researcher with over 100K followers:

I’ve proposed something similar to this earlier here in the forum, but not sure what happened to this, I’ve also sent this to the foundation’s CBO, the legend Pierre Samaties, for reference

Potential Integration of ckBTC and ckETH with online banks

Hello ICPeople! Ishaaq from The ICP Pulse here. So, what I’ve seen as part of the utility around ckETH and ckBTC, I hereby propose the following. Integrating ckBTC and ckETH through a potential partnership with the following crypto friendly banks. List of Banks Dukascopy Bank - A Bank based in Geneva, Switzerland Offering retail services to crypto and forex clients. regulated by FINMA. Xapo Bank - A Bank based in Gibraltar, offering services to both institutions and retail clients, most …

Also, before I start, I will tag some legends at the foundation for their attention:
@chepreghy @cryptoschindler and @Lomesh-dfn1

Now, to approach the CHF stablecoin scenario, I think Dukascopy Bank in Switzerland would be a perfect fit because;

• They are a FINMA-regulated entity.
• They’ve closely worked with the foundation [see Dukascopy TV episodes].
• Establishing a CHF stablecoin on ICP with them will expose ICP to their FX and derivatives traders.
• According to Swiss law, only banks can issue such stablecoins, so this is a good correlation.
• I’ve asked their CS on this, and they are happy to work on this with the foundation’s support.

Note: It’s noticeable that the foundation has been working on USD stables, but I believe we approach this, as things seem to be much easier to handle, considering the foundation is based in Switzerland.
Also note that this is a suggestion from my side, I am not sure how much this integration would cost, etc.

Would like to see the foundation taking the relevant steps for this, because I truly care about ecosystem growth, and have done research to come to the conclusion that this is a wonderful approach.

Last but not least, if we don’t take initiative, someone else will eventually.
This is not for retail adoption [obviously they will use it, even myself], but from my understanding, this integration would allow ICP to see the Financial Giants such as PostFinance, UBS, and potentially even Wintermute using ICP

Also, looking forward to community member senti, along with Leadership senti in this scope.

However, if this proposal never gets noticed, it would be very unfortunate.
MINGA [Make ICP Great Again]
Best,
Ishaaq

[ishaaqziyan]

Hi legendary @borovan ser sorry to ping you here, but I would like to hear what you think about this scenario, as a whale.
Looking forward to hearing from you.
Thanks

[baolongt]

I saw momentum from Dfinity to build some new ICRC for stable coin.
Is that anything that we not know about upcoming partner?

[ishaaqziyan]

No idea on that fam.
But, maybe yes who knows

[MForum]

UBS experimented with this in 2022 with a digital yield bond I remember getting a consultation paper on it for ubs wealth. The bond is still in circulation, you can effectively CK it or mirror it here, although I think it ends this year. I think Swiss financial institutions prefer built in KYCs-White list-several permissions like Dukascopy’s DCHF. There are a lot of restrictions when dealing with Swiss financial institutions, it took me a year and half to open a bank account despite working there because of a distant political connection at home country. If the KYC-AML permission structure is in place it’s do-able, but would need a lot of liquidity to get institutional adoption.

[ishaaqziyan]

Yep, I am aware that there are a lot of regulations in Switzerland.
Also, thank you for sharing the info around the UBS digitalbond; it seems to be a very intuitive approach.

Liquidity always arrived once things were deployed in an institutional way, which has always been the case for crypto.
As you might have seen, wrapped tokens have always been adopted comparatively less than truly native stablecoins.

I am just eager to know leadership’s senti on this case as well.

[maol]

There’s a CHF stablecoin available on ICP, this is VCHF issued by VNX: VNX Swiss Franc (VCHF) - Europe’s first token referencing Swiss Franc

Not a lot of liquidity just yet, but you can already get some on Kongswap and ICPSwap. Or directly from VNX, of course, but that requires KYC.

If your assessment about the attractiveness of CHF is correct, and I believe it is, then the market forces will play out and soon there will be more CHF on ICP. Let’s do it!

[ishaaqziyan]

LFG ser
Thanks for the reply.
Let me dig into this

[ishaaqziyan]

Shouldn’t we as an ecosystem start promoting using of the stables we have?
I personally learnt that this existed yesterday, and potentially many eco members might also may be unaware of this
How can we approach this in this scenario @maol ser

[ishaaqziyan]

Also, just to add here, [I know the foundation has been doing its best]
Monad to receive USDC support on day 1, not sure why Circle does not want to enable support for ICP
Does anyone know why this is happening🤔

[maol]

Circle’s platform is very easy to deploy on EVM chains, which includes Monad. Whereas non-EVM L1 is difficult and therefore expensive for Circle (and Tether, etc.) to deploy their stablecoins on, so they’re carefully placing their bets based on where they see most activity and potential for growth.

The ICP DeFi and stablecoin ecosystem needs to increase by a ballpark factor of 10 or more before the biggest stablecoin players will become interested on their own, I’m afraid. It’s all our job to get there by making ICP a better platform and doing more on ICP!

[maol]

Yes we want to do more with stablecoins. We look at stablecoins as one of two ingredients for growth, the other one being DeFi. They can only grow together, you can’t have just one or the other.

People are working on a coherent approach to growing stablecoins and DeFi, and let’s see if we can already hear more at the World Computer Summit in June World Computer Summit 2025

In the meantime, let’s give all the DeFi and stablecoin builders our support, and please let me know if you have any ideas for building stuff or improving documentation, etc.

[ishaaqziyan]

Actually, ser, I did not know this. Thank you for spreading awareness, which I truly appreciate.
Yep, there is a lot of things to do, let’s keep accelerating things ahead🫡
Also, so far documentation has been good, I go through them at least on a biweekly basis

[1eo]

I didn’t know this was live, this is great news! Is it still a thing or they have to stop like bitcoin suisse has to? Their market cap just got divided by two recently.

Are they legitimate? How are they able to operate out of Liechtenstein while Swiss companies are prohibited from issuing a CHF stablecoin?

[1eo]

@maol

Whereas non-EVM L1 is difficult and therefore expensive for Circle (and Tether, etc.) to deploy their stablecoins on

We are working on a new bridging solution that will allow you to bridge USDC from any chain to ICP in no-time. You will also be able to bridge ICP to any EVM chain.

[ishaaqziyan]

That’s nice to hear ser!
Looking forward to using it soon
[can’t wait for its launch]

[maol]

How are they able to operate out of Liechtenstein while Swiss companies are prohibited from issuing a CHF stablecoin?

Swiss regulation only applies to companies operating in Switzerland (though FINMA may take offense if a foreign company solicits Swiss clients too aggressively).
FINMA has not issued any public statements about CHF stablecoin issuers operating from abroad, I don’t see a big risk here (as long as they don’t get to market caps like Circle or Tether).

[Bing]

Hey Ishaaq and everyone in this discussion,

I’m Bing, the Founder & CEO of CLPFinance, a CDP - based stablecoin project within the ICP ecosystem, where users can deposit BTC to mint the stablecoin CUSD. I’m really excited to see this topic as it’s super interesting. Theoretically, any fiat currency can be transformed into digital tokens for use in the blockchain space through trusted and sufficient deposits, and the technical feasibility is not an issue; in fact, the technical implementation is quite straightforward. However, I believe there are several key points that we should explore further:

1. Scale: It’s crucial to achieve a certain scale. This scale should be large enough to support ecosystem applications at least. Otherwise, it might trigger a series of negative reactions, similar to the supply - demand relationship of fiat currencies in the traditional financial world. For instance, if the supply of a stablecoin pegged to CHF is too limited, it could lead to shortages in the market, affecting the normal operation of related applications and causing potential instability in the ecosystem.
2. Transparency: Transparency is of utmost importance. Take USDC as an excellent example. Even though USDT had already achieved a large - scale presence, USDC still managed to grow significantly, and its transparency was a major contributing factor. In the case of a CHF - pegged stablecoin on ICP, clear and regular reporting of reserves, auditing processes, and transaction details would build trust among users. This trust is essential for the long - term success of the stablecoin.
3. Ecosystem Interaction: This aspect comes with a substantial cost. I have a deep - seated understanding of this. Without going into specific figures, you can refer to the annual reports of USDC to see the proportion of the amounts paid to exchanges like Binance and Coinbase in its revenue. The numbers are astonishingly high. For a CHF - based stablecoin on ICP, we need to carefully consider how to interact with different parts of the ecosystem, including exchanges, DeFi protocols, and other projects. High interaction costs could eat into the profits of the stablecoin project and also limit its scalability.

There are also factors that can be relatively overlooked. For example, the exchange rate fluctuations of the corresponding fiat currency. Since the stablecoin is pegged to a specific fiat currency, some degree of exchange rate fluctuation is normal. Moreover, this can actually enable the realization of the foreign exchange market in the blockchain world. For example, it allows for the swapping between CHF - pegged stablecoins and USDT, which broadens the scope of financial activities in the ICP ecosystem.

Ideally, a digital CHF stablecoin makes sense considering its success in the traditional world. However, given the dominant position of dollar - pegged stablecoins in the digital world, we need to think about what specific differential services can be offered to promote interaction with a CHF - pegged stablecoin. Could it be an on - chain foreign exchange market? Or perhaps integrating Real - World Assets (RWA)? These are questions worth exploring further, and I’m looking forward to a more in - depth discussion with all of you.

Best regards,
Bing

[ishaaqziyan]

Heya Fam, appreciate stopping by.
I agree with many things you’ve posted, but the objective of this proposal was to approach a mainstream CHF stablecoin before any other major L1 approaches it.
[currently Tether, Circle, First Digital etc does not have this]
Believe it or not, CHF is well-regarded, very stable, and they are on the cutting edge of TradFi. There are a lot of things currently underway that many are not aware of because the Swiss are hard-working folks who don’t spend their time on press releases or so forth.

Regarding real-world scenarios, I think an onchain forex market would be an optimal solution, considering the deep liquidity around CHF, rather than RWA [ which is also great]

Looking forward to a healthy discussion on this with the forum fam.
Best,
Ishaaq