The Swiss Financial Market Supervisory Authority (FINMA) has introduced new regulatory guidelines for stablecoin issuers to improve oversight and reduce financial risks associated with these digital assets.
The guidelines, released on July 26, aim to classify stablecoin issuers as financial intermediaries, subjecting them to stricter regulatory standards.
Under the proposed framework, stablecoin issuers must comply with Anti-Money Laundering (AML) obligations similar to those imposed on traditional financial institutions.
This includes verifying the identity of stablecoin holders and identifying beneficial owners to address concerns related to potential illicit activities such as money laundering, terrorism financing, and sanctions evasion.
FINMA’s guidance also outlines conditions under which stablecoin issuers can operate without a banking license. These conditions include having a bank guarantee in case of default and meeting minimum requirements for default guarantees. The framework aims to protect depositors while allowing for innovation in the stablecoin sector.
This regulatory move comes amidst the rapid growth of the stablecoin market, which has expanded significantly in recent years. Global regulators are increasingly focused on establishing guidelines for this evolving sector, with at least 25 countries implementing stablecoin regulations or legislation at the end of 2022, according to the PwC Global Crypto Regulation Report 2023.
While the proposed measures strengthen oversight and customer protection, they do not provide the same level of security as a full banking license. Nevertheless, FINMA’s approach represents a significant step towards creating a more secure and transparent environment for stablecoin operations in Switzerland.
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