Union Bank AG of Liechtenstein is to become the world’s first regulated bank to issue its own crypto-token, according to a press release dated 17 August 2018.
The Union Bank Payment Coin will be a stablecoin pegged to the value of the Swiss franc and issued in conjunction with the FMA, the country’s financial watchdog.
‘Disrupt the Approach to International Trade’
The bank, which mainly services corporations in German-speaking countries and the Middle East, aims to become a blockchain investment bank, according to chairman M.H. Dastmaltchi. Said he: “…our fiat-backed Union Bank Payment Coin has the potential to disrupt the approach to international trade and international cross-border transactions.”
The Principality of Liechtenstein is a micro-state of 160 square kilometres and about 38,000 people, landlocked between Switzerland and Austria. It is one of the wealthiest countries in the world per capita, with an advanced financial sector and busy tourist industry. It is not a member of the EU, and its official currency is the Swiss franc.
Earlier this month, Liechtenstein Cryptoassets Exchange signed a partnership with Binance to create the imaginatively-titled Binance LCX. The new exchange allows trading of cryptocurrencies with the euro and Swiss franc.
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Binance provides and maintains the exchange itself, while LCX takes care of things like legal requirements and customer service. It is currently hiring staff to fill up its office.
Extensive Economic Applications
Cointelegraph reported in March when the Liechtensteiner Prime Minister Adrian Hasler announced a draft of new blockchain-friendly legislation. “The planned regulations will make us one of the first nations worldwide to regulate this topic this broadly, laying the groundwork for extensive economic applications,” he said during a speech in Vaduz.
There are some other banks that have indicated their intention to issue a cryptocurrency. MUFG of Japan, which is the world’s fifth largest bank with $2.79 trillion in assets, announced its Utility Settlement Coin in January 2018 and began testing it in May with nearly 100,000 customers.
Like the Union Bank Payment Coin, the Utility Settlement Coin will be pegged to the fiat currency of its home country.