Swiss Franc Strengthens; Crypto Flows Drive Volatility

The Swiss franc has strengthened sharply, rising more than 13% versus the dollar and to multi-decade highs versus the euro, driven by safe-haven flows and a gold rally; linking stablecoins or crypto flows to the franc could further buoy the currency, hurting exporters and constraining the Swiss National Bank's ability to ease policy. That dynamic is creating borrowing and issuance opportunities, such as very long-dated cantonal bonds trading at sub-1% yields, even as Switzerland's yield curve remains negative out to roughly six years. Regulators are increasingly wary: India's RBI deputy governor warned that stablecoins could undermine policy sovereignty, argued CBDCs could better provide claimed functions, and described unbacked cryptocurrencies as essentially valueless. Crypto markets saw heavy volatility around the U.S. Federal Reserve's 25 basis-point cut to 3.75%–4.00%, with about $550 million of liquidations in 24 hours (roughly $100 million in the hour before the decision) and U.S. spot Bitcoin ETFs recording roughly $470 million in outflows as BTC dipped toward $108,000, although ETFs still hold over 1.5 million BTC. Together, these developments show how crypto capital flows can amplify currency pressures and asset-price volatility, complicating policy responses while creating market opportunities.