In a recently published white paper, the Swiss Bankers Association (SBA) proposed the issuance of a joint deposit token on a public blockchain.

The SBA noted a consensus that stablecoins be issued by registered institutions and cited a push to regulate stablecoins by the FSB, OECD, and BCBS. This will enable supervision and optimal investor protection. Again, it stated the widespread adoption of digital currencies, including stablecoins, the breakdown in the crypto market, and the need for more trusted and reliable assets.

Consequently, the SBA suggests three possible approaches to handling the situation. In one instance, individual banks can issue their tokens with their rules. Otherwise, they propose that banks separately launch their tokens but follow a standardized regulation and are fully backed by cash reserves. The third approach, which the SBA favors, is the joint deposit token approach.

(By Babafemi Adebajo)