Crypto: Switzerland is taking drastic measures against stablecoins!
Switzerland, recognized for its stable and innovative financial environment, is facing a new controversy regarding stablecoin regulation. FINMA (Swiss Financial Market Supervisory Authority) has recently proposed new guidelines to regulate stablecoin issuers. This has sparked mixed reactions within the crypto community.
Switzerland tightens its regulations on stablecoins
Stablecoins, this subcategory of crypto backed by traditional currencies or other assets, have gained popularity in recent years. However, their rapid growth has also raised global regulatory concerns. Notably, regarding money laundering and terrorism financing. To address these concerns, FINMA proposes to classify stablecoin issuers as financial intermediaries! Subjecting them to the same anti-money laundering obligations as traditional financial institutions. Especially since euro-backed stablecoins are making waves despite strict European regulations.
According to the new guidelines, stablecoin issuers will have to verify the identity of stablecoin holders and establish the identity of the beneficial owners. Additionally, FINMA requires these crypto issuers to have bank guarantees in case of default, to protect depositors. These measures aim to enhance depositor protection and mitigate the financial and reputational risks associated with stablecoins.
Crypto Community Reactions!
While FINMA asserts that these measures enhance depositor protection, they are not without controversy. Some actors in the crypto sector believe that these requirements could stifle innovation and the growth of stablecoins in Switzerland. Moreover, banks providing default guarantees might be exposed to legal and reputational risks in case of irregularities with stablecoin issuers.
FINMA’s proposal represents a significant step in stablecoin regulation in Switzerland. It reflects a desire to protect the financial system while addressing the challenges posed by the rapid rise of digital assets. However, it remains to be seen how these measures will be received by the crypto sector and whether they will balance innovation and security, as is the case with the AI legislation adopted by the EU.
