Cryptocurrency Firms Now Licensed Under Updated Banking Regulations in Switzerland
Swiss FINMA recently introduced new guidelines for companies, including blockchain and cryptocurrency-based firms interested in the new FinTech license.
Details of the Guidelines
Switzerland’s financial regulatory body, the Financial Market Supervisory Authority (FINMA), recently published a set of guidelines for the procurement of the new FinTech License. Cryptocurrency and blockchain-based firms are among companies who are eligible to apply for the new license.
According to FINMA, the license comes with “relaxed requirements,” and it enables companies to accept public deposits as high as CHF 100 million. The move by the regulatory body comes after an amendment to the Banking Act back in November.
The Switzerland financial regulatory body, however, gave specific conditions to companies interested in the new license. FINMA said:
The FinTech license allows institutions to accept public deposits of up to CHF 100 million, provided that these are not invested and no interest is paid on them. A further requirement is that an institution with a FinTech license must have its registered office and conduct its business activities in Switzerland.
Beginning from January 1, 2019, blockchain and virtual currency firms would meet specific criteria to qualify for the new license. FINMA stated that applicants are to submit their applications in one of Switzerland’s official languages. Part of the requirements includes reasons for applying, description of the proposed organization and target audience.
FINMA also requests full accountability from the board members of the firm, including names, date of births, nationality, and a curriculum vitae. Others include Swiss criminal records six months old and a debt enforcement register extract.
Swiss FINMA and the Cryptocurrency Industry
Switzerland is home to hundreds of cryptocurrency startups. The country’s various policies show its strong support for the growing market, while it solidifies its position as the world’s leading virtual currency hub.
The Swiss financial regulatory body, FINMA, granted a license to the Zug-based company, Crypto Fund AG, a subsidiary of Crypto Finance. The asset management license enables the firm to give a variety of collective investment products that monitor cryptocurrencies. The company received a distribution license back in June.
Also, a blockchain startup operating in Switzerland, Smart Valor, received a license from FINMA to launch an online investment platform. The firm further expressed its desire to expand its services by mid-2019, by applying for a banking license.
SEBA, a virtual currency startup formed by former Swiss bankers, raised $100 million from local and foreign institutional investors to fund its regulated cryptocurrency bank. The startup, however, needed a securities dealer and banking license from FINMA to form a licensed virtual currency banking solution.