The Swiss Financial Market Supervisory Authority (FINMA) has issued new guidelines to address risks associated with stablecoins for both issuers and banks offering guarantees.
These guidelines emphasize the importance of stablecoin issuers verifying the identities of token holders and beneficial owners to mitigate potential risks.
FINMA clarified that banks accepting public deposits in exchange for stablecoins typically require a banking license. However, issuers may be exempt if financial lenders provide default guarantees under specific conditions. To protect depositors, FINMA outlined minimum requirements for such guarantees, including direct claims against the Swiss bank providing the guarantee in case of issuer bankruptcy, and coverage of the total amount of public deposits, including interest.
These guidelines build upon FINMA’s September 2019 supplementary guidelines on initial coin offerings (ICOs). They also reference a recent Federal Council report highlighting the need to address regulatory gaps in the stablecoin sector. However, specific details of the proposed actions that were in line with the suggestions were not provided.
Notably, European institutions have been actively releasing new guidelines for the financial industry as the region prepares for a new regulatory regime. The European Banking Authority (EBA) recently expanded its Travel Rules guidelines to include crypto service providers and their intermediaries. Starting December 30, crypto exchanges operating within the European Union (EU) will need to comply with new rules that mandate reporting information on fund and crypto asset transfers. These new rules effectively bring crypto-asset service providers (CASPs) under the EU’s Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) framework.
Additionally, the Bank of Italy will soon issue guidelines on implementing the EU’s Markets in Crypto-Assets Regulation (MiCA). Governor Fabio Panetta announced on July 9, 2024, that these new guidelines aim to ensure the effective application of MiCA and protect cryptocurrency holders.
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