Switzerland: Regulated Crypto Bank Now offers Yields on Its Stablecoin

Sygnum–a digital asset bank with operational licenses in Switzerland and Singapore, is offering a 0.75 percent annual yield on its stablecoin, the Digital CHF (DCHF), a press release on Mar 16 reveals.

The bank is launching a 3-month Digital CHF (DCHF) fixed-term deposit product in a Swiss negative interest rate environment.

Sygnum is Trailblazing

To earn positive yields, CHF holders must convert their fiat to DCHF through Sygnum’s integrated account. Here, owners can buy DCHF, BTC, ETH, and a range of other digital currencies using CHF, USD, SGD, and the Euro.

The DCHF is a digital alternative to the Swiss Franc (CHF). It is pegged 1:1 to the CHF, with coverage from the esisuisse insurance scheme. The Swiss central bank, the SNB, presently charges negative interest rates of -0.75 percent, eroding value. At this state, users are paying banks to save on Swiss accounts.

The product is part of Sygnum tokenization solutions enabling on-chain settlement, eliminating the need for intermediaries.

Commenting, the head of Credit and Lending at Sygnum, Pascal Gähweiler, said the product is simple to use and easy to access:

“Sygnum’s DCHF fixed-term deposit is an investment that is simple to understand and easy to access. We created this product for our clients who are looking to protect the value of their wealth while maintaining short to medium-term liquidity.”

Countering Negative Interest Rates

The digital bank introduces the product due to increasing demand for a yield-generating money market in Swiss Francs. It also extends its repertoire of products across various applications, including in eCommerce and electronic promissory notes.

Coincidentally, the launch is amid the growth and shift to DeFi. Protocols–in a bid to encourage participation, avail high yields.

For savvy investors, the launch of the fixed-deposit product, in an era of negative interest rates in Switzerland, is an opportunity for a low-risk generation of yield from a centralized platform helping drive the adoption of digital currencies.

As BTCManager reports, more protocols, including IOST, are changing their roadmaps to focus on DeFi and other emerging crypto sectors like NFTs.