This week signified a major breakthrough for stablecoin payments. Much derided for the lack of speed and power needed to perform consumer payments, this week Coinify, Sygnum Bank and Galaxus announce the world’s first e-commerce transaction using a bank-issued stablecoin.
World’s first e-commerce payment using stablecoin
The Sygnum Digital Swiss Franc (DCHF), pegged 1:1 with the Swiss Franc, eliminates the need for card systems, reduces costs and fraud, and processes transactions in real-time. This connection between the digital and traditional economies has the potential to revolutionise the $3.5 trillion e-commerce industry and forge direct connections between consumers and online retailers.
In a world first, the Digital Swiss Franc (DCHF) stablecoin was successfully used for an e-commerce payment transaction with Swiss online retailer, Galaxus. The transaction was enabled by the digital currency platform provider, Coinify[1].
Over $3.5 trillion per year[2], including $11 billion in Switzerland[3], pass through a chain of payment service providers and card systems during e-commerce transactions. The multiple processes required to approve and facilitate payments provides opportunities for fraud and increase online retailers’ transaction costs and chargebacks.
The value of Sygnum’s DCHF is pegged 1:1 to the Swiss Franc. When used for e-commerce payments, no intermediaries are involved, and the transactions happen in real-time with stable values. This reduces costs for online retailers by eliminating card systems and protecting against fraud, says Sygnum in a company statement.
“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, Coinify’s CEO. “This speaks volumes about the potential of trusted, price-stable, digital currencies in the e-commerce space.”
Unlike unaudited stablecoin issuers, Sygnum is a regulated bank that holds as collateral one Swiss Franc in the Swiss National Bank for every DCHF it generates in its client accounts. DCHF also facilitates Sygnum’s innovative tokenization solution that generates digital versions of assets like company shares and real-estate on the blockchain that can be securely traded, paid for, and delivered instantly.
“This transaction is a further proof-point of the value of Sygnum’s DCHF and its potential to drive digital transformation in major global industries like e-commerce and payments,” concludes Martin Burgherr, Sygnum Bank’s Chief Client Officer. “We continue to innovate and foster partnerships such as this to accelerate the development of the global digital asset economy” he adds.
[1] In this first phase, the Galaxus DCHF payment option is only available to a select group of Swiss customers.
[2] https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/
[3] https://www.handelszeitung.ch/konjunktur/der-e-commerce-der-schweiz-knackt-die-10-milliarden-grenze
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