FINMA Proposes New Regulations for Stablecoin Issuers

The Swiss Financial Market Supervisory Authority (FINMA) is set to introduce new rules for stablecoin issuers to enhance regulatory control and reduce financial risks.

These rules aim to address concerns about the impact of stablecoins on financial institutions and the broader market.

FINMA’s guidelines propose treating stablecoin issuers as financial intermediaries, highlighting the increased risk of money laundering, terrorism financing, and sanctions evasion linked to these digital currencies. The new regulations would require stablecoin issuers to follow the same Anti-Money Laundering (AML) rules as traditional financial entities, including verifying the identities of holders and beneficial owners.

To operate without a banking license, stablecoin issuers must meet specific conditions to protect depositors. These include having a bank guarantee in case of default, informing customers about guarantees, and allowing immediate claims in case of insolvency.

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Despite these measures not offering the full protection of a banking license, they aim to safeguard customer interests and maintain high standards for stablecoin issuers. The rapid growth of stablecoins like Tether (USDT) and USDC has prompted global regulators to establish clear guidelines for this expanding sector.

By the end of 2023, at least 25 countries, including Switzerland, had introduced stablecoin regulations, according to the PwC Global Crypto Regulation Report 2023.

Alexander Stefanov