Title
Proposal to list XCHF-USDC pair (CryptoFranc)
Summary
CryptoFranc (XCHF) is a stablecoin bound to the Swiss Franc.
XCHF is a payment token, issued and transferable on the Ethereum Blockchain, based on the ERC-20 standard and pegged to the Swiss Franc in a 1:1 ratio.
XCHF is issued by Bitcoin Suisse AG.
Each XCHF token represents a claim of one Swiss Franc (CHF) against the issuer, backed by a bank guarantee (Sygnum Bank AG)
The smart contract underlying the XCHF token has been audited by Chain Security AG with no critical issues identified and recommendations successfully mitigated prior to deployment of the smart contract.
Switzerland maintains itself not only as a global financial hub, but also a country that supports innovation and growth in cryptocurrencies and digital assets.
Building out the currency pairs on DFX supports and increases the utility of the protocol.
CryptoFranc (XCHF) Introduction and Token Terms 2021-Q4:
Initial starting volume: XCHF 2,000,000 January 2021
For
XCHF is a stablecoin pegged to the 7th most traded currency worldwide
The utility of DFX increases as more asset pairs are tradeable
XCHF has a larger fully diluted market cap, as well as significantly more holders and transfers, as compared to CADC which is also supported by DFX
Supporting XCHF provides the opportunity to attract additional users to the DFX protocol from Switzerland, a global financial hub with a strong interest in cryptocurrencies
The XCHF code has been audited by a reputable security firm
The issuer Bitcoin Suisse AG is a trusted company in the digital asset space
Each XCHF token is backed by a bank guarantee by Sygnum Bank AG for the protection of users
Against
XCHF is a relatively new stablecoin
XCHF could compete for liquidity providers amongst the current DFX pools
XCHF has higher volumes, but many people identified the issuer as questionable.
DCHF by Sygnum has lower volumes, but seems to be more credible
Personally, i don’t have much knowledge but support the stablecoin with more credibility. So DCHF it is. If volumes are low, maybe dont list it in short term and focus on other currencies
Also echoing discord, my understanding is that Bitcoin Suisse had applied for a Swiss banking license and were advised that their application would not be approved due to concerns regarding weaknesses in their AML policies. While this could be interpreted as indicative of sketchy behaviour, it could also be reflective of strict regulator requirements for becoming a Swiss Bank (which is arguably a good thing). I suspect the latter is the more likely scenario.
I’d say overall Bitcoin Suisse has a very good reputation. Other stablecoin issuers on DFX are not registered as banks and if they were to presently apply I suspect they would likely be denied on similar grounds as there are stringent regulatory requirements.
I’m not tied to XCHF, but given that it has significantly better traction it strikes me as a preferable option, given that denial of a banking license on behalf of Bitcoin Suisse is not strong evidence of lack of trustworthiness.
I would be interested in inviting the issuer (Bitcoin Suisse) to make a case to get listed on DFX. If this is something the community wants, the core team can reach out and hopefully have them engaged to enhance the proposal.
We can also possibly encourage Sygnum to do the same and see where it goes.
Given the competing stablecoins I think that’s a great idea to engage both issuers to ensure the one favoured by the community (if either) and hopefully with the best chance of adoption long term is selected.
Unfortunately there isn’t a clear choice for a CHF stablecoin imo. Might make sense for DFX to reach out to Sygnum since they are the issuer of both XCHF and DCHF and talk to them about their future intentions regarding a CHF stablecoin. In general Bitcoin Suisse has a really strong brand image here in Switzerland (much better than Sygnum), but I believe this image is more caused by their marketing efforts and history (Bitcoin Suisse was founded around 2014). Sygnum in general seems like the more “serious” and focused partner.
Just for clarity Sygnum is only the issuer of DCHF, while Bitcoin Suisse is the issuer of XCHF. The overlap is that XCHF tokens are backed by a bank guarantee by Sygnum since Sygnum is a registered bank for digital assets. I believe the team is reaching out to both issuers so that they each have the opportunity to make a case for their respective Swiss dollar stablecoin. Hopefully additional info will help guide the community’s potential selection.
@kevin any update / response by the issuers signalling intent to participate in discussions?
Been in contact with the DCHF team, they are not currently in a position to advocate the stablecoin in a DeFi environment due to regulatory oversight. Given the underlying bank offering XCHF is the same as DCHF, they may run into the same issues as well. The community will likely need to make an informed decision independently to move this forward.
