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FINMA publishes guide on stablecoins – Fintech Schweiz Digital Finance News
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Swiss Financial Market Supervisory Authority FINMA has published guidelines on the issuance of stablecoins.
In it, he comments on default guarantees, associated risks, and discloses his practice on stablecoins. He also draws attention to the increased risks in the area of money laundering.
Stablecoin projects have also gained importance in Switzerland in recent years. They generally aim to provide a means of payment with low price volatility on a blockchain. FINMA has already expressed its opinion on this in its Supplement to the ICO Guidelines for inquiries regarding the regulatory framework for Initial Coin Offerings (ICOs) since September 2019.
In its communication, FINMA provides information on the aspects of financial market law that arise in connection with stablecoin projects and the impact of these projects on supervised institutions.
In connection with stablecoin projects, FINMA draws attention to the growing risks in the areas of money laundering, terrorist financing and sanctions evasion. This also entails reputational risks for the Swiss financial center as a whole.
FINMA notes that several stablecoin issuers in Switzerland use default guarantees from banks, which means that they often do not require a FINMA license under the Banking Act. This creates risks for both the holders of stablecoins and the banks providing the guarantee. In addition, FINMA provides information on its minimum requirements for default guarantees in order to protect depositors. These also apply when dealing with stablecoins.