SINGAPORE – A Swiss digital asset company founded and wholly owned by a Singaporean investor on Wednesday issued two stablecoins on two major public blockchains.
The company, Anchored Coins, will issue a euro-backed stablecoin called AEUR and a Swiss franc-backed stablecoin, ACHF, on Ethereum and BNB Chain.
Both stablecoins will be backed one-to-one by their respective fiat currencies and held in Swiss banks.
The company’s founder, former Nominated MP Calvin Cheng, said the stablecoins will be available to about 10 institutional partners in the first phase of development.
There are also late-stage discussions with major digital asset exchanges for the stablecoins to be listed and traded.
“There is a clear need for stablecoins to be pegged to currencies other than the United States dollar, given the regulatory uncertainty in the US. This is the right time and right place to launch highly compliant stablecoins in two other well-regarded global currencies – the Swiss franc and the euro,” said Mr Cheng.
Anchored Coins has partnered DCS Card Centre in Singapore, so the latter will accept the two stablecoins as a form of collateral placement for credit limits on its cards.
DCS, formerly known as Diners Club Singapore, recently issued US dollar-backed tokens in Singapore as part of a pilot project.
DCS chief executive Karen Low said stablecoins are crucial in bridging digital assets to traditional finance and the company aims to lead the charge on connecting Web2 and Web3 with integrated payment experiences.
Mr Cheng noted that Switzerland has very clear regulatory guidelines for the issuance of stablecoins and that the reputation of Swiss banks is “second to none”.
As early as late 2019, Switzerland’s financial services watchdog, the Swiss Financial Market Supervisory Authority (Finma), had set out guidelines for stablecoins.
The European Union recently also passed the Markets in Crypto Assets regulation, which sets out clear rules on stablecoins. The rules will take effect around mid-2024, Mr Cheng noted.
The announcement comes a day after the Monetary Authority of Singapore issued finalised stablecoin rules that apply to Singapore-licensed issuers. The new rules include having a minimum amount of reserves and capital, and allowing investors timely redemption at par value, among other things.
Mr Cheng, who said he has no plans to issue stablecoins in Singapore, said there is no advantage for a company to issue stablecoins pegged to other fiat currencies in the Republic, except for the Singdollar.
For instance, a euro stablecoin is best issued out of Europe or should at least comply with regulations in that region, he said, adding that the Singdollar is not a major global currency, so there “will be little global demand for a Singdollar-backed stablecoin”.
Anchored Coins, formerly known as Damoon Technologies, was granted membership in Switzerland’s Financial Services Standard Association, or VQF, in early 2023. The VQF is officially recognised by Finma.
In May 2022, Mr Cheng’s Web3 Holdings was awarded a provisional virtual asset licence by Dubai’s Virtual Assets Regulatory Authority.
