August 27, 2020

Coinify enables first bank-issued stablecoin ecommerce transaction

By Ellen Daniel

The first ever ecommerce transaction made using a bank-issued stablecoin has successfully been made, according to digital currency platform provider Coinify.

Stablecoins are cryptocurrencies without the usual volatility, as their value is linked to another stable asset such as a fiat currency, for example the US dollar, or a precious metal, usually gold.

The Sygnum Digital Swiss Franc’s value is a stablecoin from Sygnum Bank whose value is linked to the Swiss Franc. According to Coinify, this type of transaction “eliminates the need for card systems, reduces costs and fraud, and processes transactions in real-time” and could have a significant impact on the $3.5tn ecommerce industry.

“With the DCHF and other digital currencies, the future of money is going back to its roots; exchanged between two parties, instantly and simply,” says Mark Højgaard, CEO of Coinify. “This speaks volumes about the potential of trusted, price-stable digital currencies in the e-commerce space.”

When stablecoins such as the Sygnum Digital Swiss Franc are used, there is no need for intermediaries, meaning transactions happen in real-time and transaction costs are lower for retailers. This also creates a direct link between consumers and retailers, rather than needing the multiple processes traditionally required to approve and facilitate payments.

However, unlike some stablecoins issuers, Sygnum is a regulated bank and holds as collateral one Swiss Franc in the Swiss National Bank for every Sygnum Digital Swiss Franc it generates.

The transaction was made with Swiss online retailer Galaxus and was enabled by Coinify.

“Galaxus strengthened its position as an ecommerce pioneer by accepting digital currencies as a means of payment in early 2019,” comments Thomas Fugmann, CFO of Galaxus. “Enabling our customers in Switzerland and Liechtenstein to make payments on our online store with stable digital currencies like the DCHF further enhances their convenience.”


Read More: Central bank digital currencies: A step-change in finance.


 

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