The Union Bank AG of Liechtenstein announced that it would issue its own security crypto token, with the authorization of the FMA (Financial Market Authority of Liechtenstein). According to the bank, this would be the first step towards the creation of a stable coin, backed by Swiss franc. The bank in the small and prosperous European country will become one of the first globally regulated financial institutions to venture into issuing its cryptocurrency.
A stable coin is linked or backed by fiat money or products, to avoid the impact of cryptocurrencies market fluctuations. We already have several examples, the well-known Tether (USDT) and TrueUSD (TSD), both backed by the US Dollar.
Union Bank AG to launch its stable coin backed by the Swiss franc
According to the announcement, the Union Bank AG of Liechtenstein aims to position itself as one of the first investment banks to offer all of its services based on cryptocurrency technology and eventually implement this technology in all its operations.
“As a licensed and regulated bank, we are in a privileged position to combine all the advantages of traditional banking with the possibilities inherent in blockchain technology. Therefore, our Union Bank fiat-backed stable coin has the potential to alter the focus of international trade and cross-border international transactions,” said MH Dastmaltchi, the Chairman of Union Bank AG.
Liechtenstein is a crypto-friendly nation
That vision contrasts with the general opinion of banking sector representatives in several countries, which are opposing cryptocurrency, although they are in favor of they underlying blockchain technology. However, an incursion into cryptocurrencies market made by a bank established in a country belonging to the European Economic Area could open the door to crypto adoption to other financial institutions in the European Union, at least.
Liechtenstein, a Central European country, known as a tax haven, whose economy is based mainly on tourism and financial services, has shown a friendly policy towards cryptocurrency.
According to the Union Bank official press release, as it is a crypto-friendly environment, Liechtenstein currently supports ICOs and cryptocurrencies market enthusiasts.
Jackson Bey was born and raised in Lethbridge Alberta but moved east when he was 22. Apart from running his own consulting firm. Jackson spends his time canoeing the many lakes of Ontario. As a financial journalist Jackson has published stories for CBC Business Online, as well as Buzz Feed and Motherboard. As a contributor to Billionaire 365, Jackson mostly covers markets and trade.