The Swiss Financial Market Supervisory Authority (FINMA) has issued new guidance for stablecoin issuers, emphasizing the importance of verifying the identities of all digital token holders pegged to fiat currencies. This move aims to address the risks and challenges associated with stablecoins for issuers and banks providing guarantees.

Key Points of FINMA’s Guidance

FINMA’s guidance, released on July 26, highlights several crucial aspects:

  • Identity Verification: Stablecoin issuers must verify the identities of all token holders and beneficial owners to mitigate potential risks.
  • Banking License Requirements: Accepting public deposits in exchange for stablecoins often necessitates a banking license. However, default guarantees provided by financial lenders can sometimes exempt issuers from this requirement under specific conditions.

“The identity of all persons holding the stablecoins must be adequately verified by the issuing institution or by appropriately supervised financial intermediaries.” – FINMA

Banking Sector Considerations

FINMA also addressed the banking sector, noting that default guarantees must meet certain criteria to protect depositors:

  • In case of the issuer’s bankruptcy, each customer should have a direct claim against the Swiss bank issuing the default guarantee.
  • The default guarantee must cover at least the total of all public deposits, including any interest earned by customers.

Regulatory Landscape

The guidance references a Federal Council report on regulatory issues within the financial sector, highlighting the need to address regulatory gaps in the stablecoin industry, although specific details were not provided.

In Switzerland, stablecoins currently operate under the standard legal framework for financial services rather than having a dedicated regulatory framework. They are generally classified either as deposits under banking law or as collective investment schemes, depending on the management of the underlying assets.

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