Centi issues a Swiss Franc stablecoin

With this solution, Centi allows merchants to benefit from direct payment settlement into their banks in their preferred fiat currency without having to change accounting procedures or have any crypto knowledge. In essence, Centi’s clients will receive services similar to those provided by the credit card industry with substantially reduced fees. 

The Centi Swiss Franc stablecoin is fully backed by a Swiss Bank guarantee and runs on a highly performant blockchain. According to the company press release, this stablecoin can be considered the closest current implementation of a central bank digital currency.  By allowing for direct settlement between buyers and sellers, Centi’s stablecoin eliminates the need for intermediaries. As a result, it reimagines the four-party Credit Card model that has been running since the early 1970s. 

Centi’s Global Payment Network blends the primary advantages of cash and electronic payments with the efficiency, value for money, and flexibility of digital solutions, and it offers seamless integration with online, POS, and cashier payment systems. In addition, by leveraging blockchain technology, it is able to offer cheaper fees when compared to other companies. Centi’s payment processing stablecoin solution aims to provide consumers and merchants with a lower-cost, easy-to-use alternative to legacy payment processing systems such as Visa and MasterCard. 

In the company press release, Centi officials talked about blockchain technology and how it has helped them to reduce payment processing fees. They also detailed how the system itself is built around open API principles, which allows third-party developers to build their own apps on top of it.

What are stablecoins and how do they work? 

According to investopedia.com, Stablecoins are cryptocurrencies whose value is pegged, or tied, to that of another currency, commodity, or financial instrument. Stablecoins aim to provide a solution to the volatility of cryptocurrencies such as Bitcoin, which has made crypto investments less suitable for common transactions. 

While volatility can sometimes be beneficial for traders, it doesn’t offer any benefits for routine transactions. Specifically, to serve as a medium of exchange, a currency that's not legal tender must remain relatively stable to assure that those who accept it will benefit from purchasing power in the short term.  

One of the most popular stablecoins is Tether, which is pegged to the US dollar at a 1:1 ratio and backed by gold reserves. Stablecoins may be pegged to a currency such as the US dollar or EURO, or to the price of a commodity such as gold. They also maintain reserve assets as collateral or through algorithmic formulas that are supposed to control supply.