In an effort to enhance regulatory oversight and address potential financial risks, the Swiss Financial Market Supervisory Authority (FINMA) has introduced new guidelines for stablecoin issuers. This proposal is part of a broader initiative to address the growing concerns surrounding the impact of stablecoins on both regulated institutions and the wider financial system.
According to a guidance document released on July 26, FINMA proposes classifying stablecoin issuers as financial intermediaries. This classification is intended to address the increased risks associated with stablecoins, including potential issues related to money laundering, terrorist financing, and sanctions evasion.
Stablecoins are digital assets that are pegged to the value of traditional currencies or other assets. While their adoption has surged, the rapid growth of this sector has raised global regulatory concerns regarding their potential for misuse and illicit activities.
Anti-Money Laundering Obligations
The guidance highlights that stablecoin issuers will be subject to the same Anti-Money Laundering (AML) obligations as traditional financial institutions. This includes requirements to verify the identity of stablecoin holders and to establish the identity of beneficial owners.
FINMA’s guidance states:
“The stablecoin issuer is therefore considered a financial intermediary for Anti-Money Laundering legislation and must, among other things, verify the identity of the stablecoin holder as the customer following the applicable obligations (Art. 3 AMLA) and establish the identity of the beneficial owner (Art. 4 AMLA).”
Operational Conditions and Bank Guarantees
The new guidelines also outline how stablecoin issuers can operate without holding a banking license if they meet specific conditions. FINMA emphasizes that these conditions are designed to protect depositors. Issuers must have a bank guarantee in place to cover potential defaults.
According to FINMA, the framework sets minimum requirements for default guarantees. Issuers are required to:
- Inform customers about the guarantee conditions.
- Adhere to guarantee limits.
- Allow immediate claims in the event of insolvency, bypassing the need for a certificate of loss.
Protection and Security Measures
While FINMA asserts that these measures enhance depositor protection, they do not offer the same level of security as a traditional banking license. Nevertheless, the regulator is focused on mitigating risks associated with default guarantees and ensuring that stablecoin issuers adhere to stringent standards to safeguard their customers.
The stablecoin sector has seen significant growth, reaching unprecedented market capitalization levels in 2023. In response to this expansion, global regulators are rapidly developing frameworks to regulate this evolving sector.
The “PwC Global Crypto Regulation Report 2023” indicates that by the end of the year, at least 25 countries, including Switzerland, had implemented stablecoin regulations or legislation. This global trend underscores the increasing importance of establishing clear regulatory guidelines for stablecoin operations.
| Aspect | Details |
|---|---|
| Regulatory Classification | Financial intermediaries |
| Key AML Obligations | Verify identity of holders and beneficial owners |
| Operational Conditions | No banking license required under specific conditions |
| Default Guarantee Requirements | Inform customers, adhere to limits, allow immediate claims |
| Current Sector Growth | Significant market capitalization increase in 2023 |
| Global Regulation Status | At least 25 countries have implemented regulations |
FINMA’s proposed guidelines represent a significant step toward tightening regulatory oversight of the stablecoin sector. By classifying stablecoin issuers as financial intermediaries and imposing stringent AML requirements, FINMA aims to address potential risks and enhance the security of this rapidly growing market. As global regulators continue to develop frameworks for stablecoins, these guidelines reflect the increasing importance of robust regulatory measures in the financial sector.
