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Bank-issued stablecoin used for the first time at a popular online retail store

Photo of: Janeth Diamond
by Janeth Diamond

A stablecoin for an eCommerce transaction? The idea could have sounded a bit shaky last year, but in the world’s first-ever recorded transaction, A financial institution focused on digital assets asserted that it has recently completed the world’s first E-commerce transaction using a bank-issued stablecoin. The Sygnum Digital Swiss Franc (DCHF), was used as the payment currency to buy an AppleiPad at Digital Galaxus which is Switzerland’s largest online retailer. DCHF has a pegged 1:1 basis with the fiat currency. Coinify, the digital currency platform provider was responsible for the first-ever sale to take place. 

Sygnum was granted a Swiss banking license a year ago and with DCHF it believes that the need for credit card and debit card systems will be eliminated. Not just that, it will also go a long way in reducing costs and fraudulent activities that will help merchants in a great way. The transactions also can be processed on time and in real-time. The bank has a vision that this new digital asset could spread its light in other industries especially the $3.5 trillion eCommerce industry. It can prove to be a safe connection between consumers and online retailers. At present, the facility of the new payment is only available to a select group of Sygnum clients. 

In a blog post at Coinify, Mark Højgaard said what it is planning to offer stands out against the other major stablecoin issuers like Tether because the bank is regulated. One Swiss Franc is held as collateral for every DCHF that is in circulation. The bank said in a statement:

“We believe a stablecoin issued from a regulated, audited bank that holds the equivalent amount of fiat in a Central Bank provides the highest level of transparency and the trust, which is one essential factor for broader adoption.” 

Transparency is a great pointer towards evolution but at the same time, it could also be an obstacle to wider adoption for reasons very apparent. The bank added that technical challenges are not much of a worry but transparency could hold people back. The concern’s move towards tokenization also points out in the direction of other digitized assets like company shares, real estate which can be securely traded, paid for, and delivered almost immediately. Interestingly this is not the first time that Digitec Galaxus has indulged in digital assets. The retailer had started accepting cryptocurrencies as a payment mode since March last year. It had supported BTC, XRP, litecoin, and many others for payment. In the beginning, the first crypto could only be used for purchases above 200 CHF but August last year this minimum spend limit was further removed. Now the popular retailer will also add DCHF to the list it accepts when the officials release it publicly. 

With more and more countries embracing cryptos, they could assume a larger role in eCommerce in a few months to come. Also, certain rumors state that PayPal will begin direct selling of Bitcoin to its 325 Million users proving that crypto has arrived!