Strangely, the promoters behind two new stablecoins seem to understand the inherent dangers behind these crypto assets. To clarify, ROCKZ and Smart Valor are planning stablecoins they will peg to the Swiss Franc.
Many observers consider the Swiss Franc (CHF) one of the world’s most bulletproof currencies. For instance, the Swiss Franc was valued at $1.01 USD on 26 March 2019.
Notably, Switzerland is a small historically neutral country with no major controversies or enemies. Unlike the United States or China, Switzerland is unlikely to go to war.
Plus, Switzerland is unlikely to break up like the European Union; or the United Kingdom could. Finally, the possibilities of revolution, economic collapse, political crisis, or civil unrest in ultra-democratic and hyper-capitalist Switzerland are remote.
When combined with Switzerland’s history as a banking leader, this stability makes the Swiss Franc among the world’s most appealing small currencies. Not surprisingly, organizations like ROCKZ and Smart Valor are planning CHF
Are the Swiss Franc Stablecoins for Real?
To clarify, these claims are theoretical because neither ROCKZ nor Smart Valor appears to be available yet.
However, Alprockz AG; the organization behind ROCKZ is issuing a utility token called APZ. However I could not find the APZ token traded on CoinMarketCap, a sign it is not live yet. In addition, the ROCKZ platform is live online. Instead, Alprockz is holding an APZ ICO to raise.
On the other hand, ROCKZ founder Yassine Ben Hamida claims his venture has a Market Capitalization of $2 billion. Furthermore the ROCKZ website claims to have raised 1.3 billion CHF or $1.3 billion USD.
How Swiss Franc Stablecoins could offer liquidity
Interestingly, ROCKZ hopes to offer liquidity by keeping 90% of its Swiss Franc holdings in paper in vaults and 10% at various Swiss Banks. Notably, this could ensure liquidity but not stability.
Liquidity is more important than stability because you can cash out a liquid currency and spend it. For instance, you can quickly convert the currency into something you can use to buy food for your family.
To clarify, you can quickly convert the Swiss Franc into United States Dollars; or Euros, which merchants all over the world will accept. Notably butchers in hyperinflation basket case Venezuela will accept payment in US Dollars; even though it is technically illegal, The Guardian reports.
To explain, the international currency markets still determine the value of Swiss Franc. However, ROCKZ owners will have an altcoin they can cash in for a spendable fiat currency if this scheme works.
Fewer details about Smart Valor are available but the organization is planning an initial coin offering (ICO) and a crypto asset platform. Importantly, Smart Valor calls its product a “Smart Token” rather than an altcoin.
Hence, I think the Smart Valor token is really a smart contract that will guarantee payment in Swiss Francs. Such a contract could be valuable because it can theoretically guarantee payment in one of the world’s safest currencies.