UBS has announced the launch of a joint initiative between six Swiss banks to investigate potential use cases for a Swiss franc (CHF) stablecoin in the country.

The coalition includes UBS, PostFinance, Sygnum, Raiffeisen, Zurcher Kantonalbank and BCV as well as stablecoin company Swiss Stablecoin AG.

UBS said that the project has several overarching goals, including developing a Swiss ecosystem for digital money, building new capabilities and experience in digital payment methods and gaining practical insights into the potential benefits of stablecoins.

The sandbox is based on a list of potential use cases that are being developed jointly. UBS described it as a controlled live environment allowing banks and participating companies to test new digital financial products in realistic conditions without causing real harm should something go wrong.

The project will run sometime this year, and UBS said it is open to other interested banks, companies and institutions.

Interest in stablecoins, cryptocurrency assets pegged to the value of a physical currency, has grown in recent years in both the public and private sectors. A consortium of more than 10 European banks is currently working to develop a euro-denominated stablecoin, launching in the second half of 2026, and in March PayPal expanded its dollar-backed stablecoin to 70 countries worldwide.

National banks including the Bank of England are also investigating use cases for stablecoins, and there are several proposals circulating for government-backed stablecoins for digital commerce.

Since they are so new, legislation around stablecoins is still being written in many jurisdictions. Yesterday, the US Treasury’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control published a proposal targeting stablecoin providers in the country that are regulated under its Genius Act.

If implemented, the new rule would require issuers in the country to establish comprehensive anti-money laundering and counter-terrorism financing operations, bringing them more in line with the expectations on mainstream financial institutions.

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