UBS and five Swiss banks have launched a collective sandbox to test a Swiss franc stablecoin. The program will run through 2026 within a monitored digital environment. The effort aims to link blockchain-based applications with traditional Swiss franc payment systems while improving payment processes.
Swiss banks build CHF Stablecoin sandbox
UBS, PostFinance, Sygnum, Raiffeisen, Zürcher Kantonalbank, and BCV partnered with Swiss Stablecoin AG to unveil the sandbox platform. The task force will test selected use cases for a CHF-pegged stablecoin within a controlled structure. The sandbox allows participants to simulate real payment flows under set transaction and user limits.
Swiss Stablecoin AG provides the infrastructure required to issue and manage the digital token. The partners will coordinate testing efforts to confirm accuracy and reliability across the platform. The program aims at developing a Swiss system of digital money and enhancing blockchain connectivity with the existing financial systems. The banks want to acquire working experience and become able to handle digital payment methods.
The sandbox will be open to additional banks, companies, and institutions that wish to participate. Currently, Switzerland does not hold a regulated Swiss franc stablecoin with much adoption. The testing targets practical insights and upgrades in payment processing.
Global banks expand Stablecoin efforts
Swiss banks are not the only ones making strides in the stablecoin market. Institutions across the world continue to explore stablecoins as demand for clear, efficient payments increases. In the crypto market, stablecoins maintain a fixed value by linking to traditional currencies and operate on blockchain.
Several institutions now test stablecoin models to compete with the current digital payment solutions. A group of European banks, including ING and UniCredit, plans to unveil a euro-pegged stablecoin in 2026. Another alliance that includes Bank of America and UBS has also looked into shared issuance models. The stablecoin market continues to boom, with estimates suggesting it could top $750 billion in the coming years.
Governments and regulators have introduced guidelines to guide stablecoin development and usage. Issuers must comply with anti-money laundering and counter-terrorism financing requirements at all stages. Data shows that stablecoins accounted for 63% of illicit crypto transaction volume in 2024.
Compliance and risk controls shape development
According to a report that was made by CCI, banks must update systems to match the speed and openness of blockchain-based transactions. Traditional systems do depend on batch processing, which cannot support continuous settlement spaces.
Institutions now need live tracking of wallet activity, liquidity flows, and transaction behavior. Compliance protocols must include quality liquid asset requirements and risk management systems. Banks also need to explore internal risk limits before debuting a stablecoin.
Know Your Customer standards are also being developed under parties like MiCA and the GENIUS Act. These rules hold verified identification and observation of customer activity. Legacy KYC systems often depend on reviews, which can miss changes in risk profiles. New models, such as perpetual KYC, enable ongoing updates to customer data and risk assessments.
Stablecoin payments surge driven by on-chain change
According to a latest Chainalysis release, stablecoins dealt with $28 trillion in real activity in 2025, and expectations suggest volumes could hit $1.5 quadrillion by 2035. Growth facilitates faster settling, lower costs, and always-on blockchain systems, which has continued to attract financial institutions.
Adjusted data shows strong organic usage, driven by payments, transfer payments, and treasury activities. Two primary drivers may push adoption further. The generation transfer of wealth of an estimated 100 trillion will move capital towards users of crypto natives.
Meanwhile, the adoption of stablecoins in retailing may render crypto payments a default choice at the counter checkout. With the growing adoption, institutions are putting more investments in blockchain services, alliances, and payment systems to serve both traditional and on-chain financial systems.