The first fully MiCA-compliant Swiss franc stablecoin does not come from Zurich or Zug, but from Frankfurt. Joint venture Allunity has launched CHFAU, a stablecoin on the Ethereum blockchain backed 1:1 by Swiss francs.
Three heavyweights stand behind Allunity: DWS Group with over EUR 1 trillion in AUM, liquidity provider Flow Traders, and Galaxy Digital. CHFAU is initially available exclusively to institutional and professional investors. Bitpanda, Rulematch, and WAWEX list the token at launch. As a regulated e-money token under the EU's MiCAR regulation, holders have a legal right to redemption at par. Allunity has held an e-money institution license from Germany's BaFin since July 2025.
Subscribe to our newsletter
The best articles of the week, directly delivered into your mailbox.
Why the franc stablecoin comes from Germany
A Swiss franc product originating from Frankfurt has a concrete regulatory reason. In July 2024, FINMA published its Guidance 06/2024 on stablecoins. This guidance required issuers or a supervised financial intermediary to verify the identity of all persons holding a stablecoin. Such requirements include intermediary holders.
No other major jurisdiction demands anything comparable. Neither the EU, Singapore, Hong Kong, Japan, nor the FATF require such comprehensive identification. Correspondingly blunt was the criticism from the Swiss Blockchain Federation:
"FINMA's requirements make it impossible for Swiss issuers to issue competitive stablecoins." - Swiss Blockchain Federation
Technically, the implementation is simply not feasible. A stablecoin circulating freely on public blockchains cannot guarantee full user identification at every point in the chain. As a result, FINMA's approach effectively makes issuance from Switzerland impossible.
Allunity's Frankfurt model as a blueprint
Allunity instead uses the EU's MiCAR framework. This regulation creates uniform rules for crypto assets across the entire European Economic Area. With a single BaFin license, Allunity can distribute the stablecoin cross-border via EU passporting. Already in July 2025, the company launched EURAU, Germany's first fully reserve-backed euro stablecoin. So CHFAU is not the company's first product.
Still, EURAU also illustrates the challenge of adoption. Its market capitalization sits at $1.2 million, ranking 16th among 22 euro stablecoins. Yet the infrastructure is broadly positioned. EURAU runs natively on six blockchains, including Ethereum, Solana, and Arbitrum. Since November 2025, Allunity has also been cooperating with Deutsche Boerse Group. Clearstream serves as custodian, and Allunity integrates EURAU into the D7 platform. From concept to market readiness took roughly two months. Additional blockchains are expected to follow throughout 2026.
Global stablecoin competition intensifies
The stablecoin market is growing rapidly. Transaction volume surpassed the combined volume of Visa and Mastercard for the first time in 2024. Annual usage is rising by 28 percent. In this environment, the major economic blocs are repositioning themselves.
With the GENIUS Act, the United States created the first federal stablecoin law in July 2025. President Trump signed it after broad bipartisan support, with a 68-to-30 vote in the Senate and 308-to-122 in the House. This law requires 1:1 reserve backing in dollars and short-term government bonds. At the same time, it classifies stablecoins neither as securities nor as commodities. Authorities expect full implementation by November 2026.
In parallel, the EU has had a functioning legal framework with MiCAR since 2024. Frankfurt is consequently establishing itself as Europe's center for regulated stablecoin issuance. Switzerland, by contrast, is falling behind. CHFAU exists alongside already active franc stablecoins such as Frankencoin (ZCHF) and VNX Swiss Franc (VCHF). Combined, all CHF stablecoins reach a market capitalization of $39 million. Euro stablecoins, by comparison, stand at $895 million.
Switzerland working on new framework, but the industry remains skeptical
In October 2025, the Federal Council responded with a consultation on amending the Financial Institutions Act (FinIA). This proposal introduces two new license categories. Payment instrument institutions would be allowed to issue stablecoins, and a separate category for crypto institutions would be created. On anti-money laundering, the Federal Council proposes a course correction. Instead of requiring identification of every user, issuers could address money laundering risks by blacklisting sanctioned addresses.
The consultation period expired on February 6, 2026. Authorities have since been evaluating the submitted responses. Already on December 3, 2025, four industry associations had submitted a joint response. The Swiss Blockchain Federation coordinated the paper together with the Crypto Valley Association, the Swiss Fintech Association, and the Capital Markets and Technology Association. Hans Kuhn, former General Counsel of the Swiss National Bank, led the working group. In their submission, the associations criticize a lack of strategic vision in the draft and overly restrictive requirements on crypto institutions. They also demand that FINMA licensing procedures be completed within six months, in line with the EU.
On February 11, 2026, the 55-page response from the Swiss Bankers Association (SBA) followed. Its central criticism: under the draft, banks would not be able to issue stablecoins directly under their existing license. Instead, they would have to establish separate payment instrument institutions. The SBA considers this licensing cascade unjustified on substantive grounds, particularly since Europe's MiCAR imposes no such restriction on banks. Additionally, the Bankers Association calls for a comprehensive regulatory impact assessment, especially regarding disintermediation risks.
