The Deposit Token (DT) is the concept of a digital currency the Swiss Bankers Association (SBA) is working on. In its White paper, the SBA lists the conditions and regulations the new financial derivatives should possess. The form of tokenized deposits, a kind of stablecoin, should open up new areas of business. Contrary to private stablecoins, which are often not adequately backed or whose providers are not telling the truth about reserves, the digital Swiss currency should gain broad acceptance.
As for the plan, the DT should serve as a payment method for buying and selling tokenized assets, i.e., it allows the cash and asset legs to be processed on the same platform. Regarding payments, the DT would be used in three areas: to settle wallet-based retail payments in combination with smart contracts, to reduce costs and frictions in payments in large or very small amounts (a smart contract could be used to enable the direct transfer of ownership, e.g., when a car is sold), and finally, to simplify payments between companies.
The idea behind DT is that many companies and households need a customised digital currency that is regulated and adequately supervised. As for expectations, Switzerland’s financial market infrastructure will be more competitive while preserving its economic and technological sovereignty.
Interoperability with other platforms (implementing DT on a public blockchain) and being a part of decentralised finance applications are the essential principles of the new digital derivative. Clients should be able to store the DT in their own wallet or use custody services offered by banks and other providers. To keep the Swiss bank system as trustworthy as it is, “the DT must meet legal and regulatory requirements while also fulfilling clients’ needs for confidentiality and privacy”, states the SBA White Paper.
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