Swiss regulator FINMA has targeted stablecoin issuers with its new proposal
In a move aimed at strengthening regulatory oversight and mitigating financial risks, the Swiss Financial Market Supervisory Authority (FINMA) has issued new guidelines for stablecoin issuers. The proposal comes amid growing concern over the potential impact of stablecoins on regulated institutions and the broader financial ecosystem.
According to a recently issued guidance document, FINMA intends to classify stablecoin issuers as financial intermediaries, highlighting the risks associated with money laundering, terrorist financing and evasion related to these digital assets.
Digital assets, linked to traditional currencies or other assets to maintain a stable value, have seen an increase in adoption. However, their rapid growth has led to regulatory concerns worldwide due to their misuse for illegal activities.
Solving financial and reputational risks
In its directive issued on July 26, FINMA emphasized that stablecoin issuers must be subject to the same anti-money laundering (AML) obligations as traditional financial institutions. This includes verifying the identity of Statcoin owners and verifying the identity of beneficial owners.
“Therefore, the stablecoin issuer is considered a financial intermediary under the Anti-Money Laundering Act and, among other things, must fulfill the applicable obligations (Art. 3 AMLA) as a customer and establish the beneficial identity of the owner (Art. 4 AMLA),” FINMA said.
Framework for default securities
In addition to AML compliance, FINMA clarified how stablecoin issuers can operate without a banking license if they meet certain conditions. These conditions ensure that depositors are protected, and issuers must have bank guarantees.
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According to FINMA, the framework sets minimum requirements for default guarantees, allowing issuers to notify customers, stay within guarantee limits and make immediate claims without waiting for a certificate of insolvency.
Improving deposit protection
While FINMA's measures enhance deposit protection, they do not match the security of a bank licence. Still, the regulator remains committed to addressing default collateral risks and ensuring that stablecoin issuers meet strong standards to protect customers.
The stablecoin sector, which consists of cryptocurrencies tied to traditional currencies such as Tether (USDT) and USDC (USDC), has experienced massive expansion in recent times, reaching an unprecedented market capitalization in 2023. In response, global regulators are scrambling to establish guidelines for this rapid growth. Sector.
According to the PwC Global Crypto Regulation Report 2023, at least 25 countries, including Switzerland, have implemented stablecoin regulations or legislation by the end of the year.
Journal: Unstable Coins: Debasement, Bankruptcy and Other Risks Looming.
