Hello everyone. Um, yeah, I'm Johannes. Thanks so much for staying so long. I know it's pretty hot outside, but uh I want to make it fun very quickly. Um, yeah.
So, today I'm going to talk about a stable coin. Um, I think there's some people interested in stable coins here. Um, I'm going to talk about the real stable stable coin. So, what I mean by that is, you know, the trusty Swiss Frank. But what is actually stability?
You know what what do we understand when we talk about stability in a stable coin? Is it no decrease in domestic purchase power that you know with one coin you can buy the same thing today that in 10 years or does it mean that it simply doesn't devalue versus other assets or as I you know written here the FX rate doesn't decrease. Why not both? And um you know I know we're all thinking in dollars in dollar terms. Um let me disappoint you.
If you look at the last 50 years the dollar actually lost this is a bit outdated. It's even worse now. I think yesterday it's minus 15%. The dollar lost about 70% against the Swiss Frank. So is that a stable coin?
I don't know. I say Swiss Frank is I'm Swiss, you know. I'm I'm I'm I'm proud to be Swiss and and I think there's some more Swiss people in here, so they might recognize what this is. Why is this Swiss Frank so stable? Let's take take a step back.
Um it's built for stability. So, you know, here you have two pictures. Uh the left is the root, which is basically the historical foundation of Switzerland. Um Switzerland is not really a country. It's actually really 26 countries which decided to somewhat work together and and made it happen.
And the other one is the battle of Marinano which the other thing Switzerland is famous for it's neutrality and you know just in the light of recent developments in the world. Switzerland has no king. Switzerland needs no king. Switzerland doesn't even have a president. In fact, Switzerland has seven presidents.
to those those ladies and gentlemen's here and that's actually I would say argue one of the basics in why Switzerland is so stable or why the Swiss Swiss the Swiss Frank stable coin the Swiss Frank is so stable is that decisions take time everything is slow and slow is good when we talk about stability because you can be sure that in 20 years time most likely things are going to be quite similar now you diving a bit deeper into the Swiss Frank. Um, Swiss Frank has been around for about 150 years, uh, it replaced a huge mess of different stable coins. And actually, if you would would have to sum up the the history of the Swiss Frank, it's it's just really good at dodging dodging shady things. I mean starting World War I where it was the only currency that was you know stayed goldbacked and and didn't you know go into like somewhat of a free float going on you know 1936 um when the world financial crisis in the you know 30s 100 years ago still the last ones to stay in gold backing they dodged Bretton Woods for the ones who don't remember Bretton Woods Breton Woods was this idea after the second world war to ps um currencies to the dollar and have a fixed exchange rate of the dollar. Switzerland did do that which in 71 led to the fact that basically when the whole thing collapsed well the Swiss Frank just stayed stable and that's where a whole you know one of the searches came from which is more than 70 years ago that actually this doesn't count into that minus 65% I said before Switzen was up to 2000 holding 40% of its currencies in gold imagine that um but things changed a bit in 2011 and I I'll get to that I I have bit of time let's do a bit of an excursion.
Do you remember this picture? Um, so here you see Switzerland with a 61%. That's on tariffs. There's no tariffs in Switzerland on any imported goods anyways. But that means that's a trade deficit or the US has with Switzerland.
Switzerland is an export nation. That is actually the reason why currency stability is so important but in a negative way that the Swiss national bank actually doesn't want the Swiss bank to be that strong because it makes it very expensive for Swiss industry to export you know pharmaceuticals um high-tech machinery you know watches what happened when Trump announced those tariffs not what you expect um the dollar actually went down against Swiss Frank it liked again. So, it made the whole thing worse. Um, so yeah, in a in a nutshell, the Swiss Swiss Frank is too stable for its own good. And um I have here on the left hand side uh it's called the Frankeddon where um from 2011 to 201 I think 14 it was the SNB actually defended or tried to defend the pack against the euro.
So they they bought 800 billions worth of euros to keep the Swiss Frank artificially low. when they stopped doing that uh it just went up 20% and in its wake um you know bankrupted many ethics traders. Switzerland is now not you know even potentially going to be backed by Bitcoin. You know replacing well with Bitcoin. That would be really cool.
There's an initiative going in Switzerland. But to sum this all up, um, Swiss is a really good hedge and that's why we're building a Swiss Frank stable coin and that's why we believe, you know, guys, hold Swiss Franks as your assets. Don't hold dollars as stable coins. And um, yeah, that's what the Swiss Frank and Frankie coin is all about. Thank you so much.
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Automatic transcript — names and jargon may be misspelled.