This is an effort from FINMA to bring blockchain-based companies and virtual assets service providers (VASPs) under the regulatory framework to foster a healthy working atmosphere.
FINMA, Financial Market Supervisory Authority (FINMA) has recently approved the banking licenses of two companies from the blockchain space. The two companies are Sygnum AG registered in Zurich and SEBA Crypto AG registered in Zug and will provide services to professional and institutional players.
https://twitter.com/A_Schneuwly/status/1165946778623062016
Sygnum AG will provide its customers with wealth management and traditional banking services using DLT and blockchain. The intended services include credit, brokerage, asset management, and tokenization.
Similarly, SEBA Crypto AG will focus on asset management with plans of offering crypto custodial services as well as transaction banking.
Guidance for Blockchain Payments
Earlier this week, the Swiss financial regulator also provided legal guidance for payments done using the blockchain network. This guidance comes as part of FINMA’s adherence to the cryptocurrency regulations issued by the Financial Action Task Force (FATF) in June 2019.
The guidance issued on Monday, August 26, is applicable to all blockchain-based companies as well as digital currency service providers like exchanges, trading platforms, and wallet providers.
FINMA adds that the blockchain-based business models cannot be allowed to bypass the existing regulatory framework. Thus, it is important that the existing rules on terror financing and money laundering apply to the blockchain businesses as well, says FINMA.
Taking the Technology-Neutral Approach
As such, Switzerland has been a safe haven for with cryptocurrency and blockchain-friendly rules over the last few years. For this reason, the government and its regulators have always adhered to a technology-neutral approach. FINMA says that it truly understands the ” innovative potential of new technologies for the financial markets”.
But at the same time, it is necessary for them to prevent bad actors from dominating this space. The regulator wrote:
“Institutions supervised by FINMA are only permitted to send cryptocurrencies or other tokens to external wallets belonging to their own customers whose identity has already been verified and are only allowed to receive cryptocurrencies or tokens from such customers.”
FINMA explains the existing lacuna saying “No system currently exists at either a national or an international level for reliably transferring identification data for payment transactions on the blockchain”.
FINMA is Switzerland’s top-most regulator monitor banking and securities sectors. It also looks of the new developments in the country’s financial space like the latest registration of Facebook‘s Project Libra. Recently, the FINMA regulators also met US lawmakers for their discussion on the Libra project.
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