SOURCE Reuters

ZURICH, April 8 (Reuters) – Six Swiss banks have joined forces to test potential uses for a Swiss franc-pegged stablecoin ​in Switzerland, UBS (UBSG.S) said on Wednesday, as lenders grapple with the ‌growing stablecoin industry and the wider growth of cryptocurrencies.

Jointly with the company Swiss Stablecoin AG, the Swiss banks are launching a secure digital live environment, a so-called sandbox, ​to explore ways to connect blockchain applications with the Swiss franc, ​the UBS statement added.

UBS, PostFinance, Sygnum, Raiffeisen, ZKB and BCV ⁠are part of the initiative, which is also open to other banks.

There ​is currently no regulated Swiss franc-pegged stablecoin with broad application in Switzerland, UBS ​said. The sandbox will be conducted in 2026 and aims to strengthen the Swiss digital money ecosystem, the bank added.

BANKS WORLDWIDE LOOKING AT STABLECOINS

Stablecoins – a type of cryptocurrency ​designed to maintain a constant value and backed by traditional currencies – are ​seen by some lenders as potential competitors, putting them under pressure to find uses for ‌blockchain ⁠technology within their own businesses.

Banks worldwide are experimenting with stablecoins, and several have joined forces to trial the technology, especially since U.S. President Donald Trump last year signed a law establishing rules for stablecoins.

A group of 10 European ​banks, including ING, ​UniCredit and BNP ⁠Paribas, last year formed a company to launch a euro-pegged stablecoin in the second half of 2026, in a ​move they hope will counter U.S. dominance in digital ​payments.

Also last ⁠year, a separate group of 10 banks, including Bank of America, Deutsche Bank, Goldman Sachs and UBS, said that they are jointly exploring issuing a stablecoin.

Stablecoins have ⁠grown ​sharply in recent years, but the market ​is dominated by El Salvador-based company Tether, and demand for the few bank-issued stablecoins has so ​far been limited.

Reporting by Ariane Luthi; Editing by Linda Pasquini and David Holmes