How ZCHF
differs.
Not every Swiss franc stablecoin works the same way. The main difference is whether a company issues it against bank deposits, or a protocol issues it against on-chain collateral.
| ZCHF (Frankencoin) | Issuer-backed CHF stablecoins | USDC | |
|---|---|---|---|
| Currency | Swiss franc | Swiss franc | US dollar |
| Backing | Over-collateralized BTC, ETH, gold and shares, visible on-chain | Bank deposits and securities held by the issuer, per its reports | Cash and US treasuries held by Circle, per its attestations |
| Issuance and control | Minted by anyone against collateral; rules set by FCS (Frankencoin Shares) holders; no freeze function | Issued by the company, which can block or freeze balances | Issued by Circle, which can freeze addresses |
| Savings access | Protocol savings rate, set by governance | None built in | None built in |
| Redemption | No issuer to redeem with; peg held by collateral and arbitrage | With the issuer, for eligible customers | With Circle, for eligible customers |
The middle column groups several issuer-backed Swiss franc tokens; their reserves, terms and eligibility differ from issuer to issuer.
The trade-off
An issuer-backed token gives you a company to redeem with and a company that can freeze you. ZCHF gives you neither: nobody can block your balance, and its one-franc value rests on over-collateralization and the market rather than on a redemption promise.