CH - FINMA’s Stable Coin Guidelines
On 11 September 2019, the Swiss Financial Market Supervisory Authority (FINMA) published a supplement to their guidelines for Initial Coin Offerings (ICO).
This supplement provides guidance on “stable coins” under Swiss financial market regulation. Among others, it is a reaction to Libra, Facebook’s stable coin, which will be pegged to a currency basket. This coin will be issued by the Libra Association, a Swiss not-for-profit organization domiciled in Geneva.
Since there is no specific regulation governing stable coins, FINMA once again affirms its functional approach (‘substance over form’) – where the economic function and purpose of a token defines the regulatory treatment – and follows the principle of ‘same risks, same rules’, while making its assessment on a case-by-case basis. FINMA elaborates that stable coins regularly fall within the scope of the Banking Act or the Collective Investment Schemes Act . Furthermore, the Anti-Money Laundering Act is largely applicable, since stable coins are often designed to serve as payment instruments. For payment systems with significant importance, a license under the Financial Market Infrastructure Act might be required.