Switzerland’s top banking regulator, FINMA, has recently granted the banking and securities dealer licenses to two crypto-blockchain banks, SEBA Crypto and Sygnum.
FINMA (Financial Market Supervisory Authority (FINMA) is a Swiss government body undertaking financial regulations of the country. SEBA Crypto, registered in Zug and Sygnum registered in Zurich have now become the regulated entities to offer their crypto services to institutional and professional customers. These firms are pure-play blockchain service providers in Switzerland.
FINMA Issues Banking License
In an announcement on Monday, FINMA revealed, for the first time that it has issued banking and securities license for blockchain service providers. FINMA also released a set of guidelines for payments on blockchain on the same day. The guidelines state that the relevant provisions of the financial market law, especially existing Anti-Money Laundering (AML) laws can be applied to blockchain payments but it also states that the inherent anonymity of blockchain technology presents increased risks. Accordingly, existing AML laws can apply to crypto exchanges, wallet providers and other virtual asset service providers.
“Blockchain-based business models cannot be allowed to circumvent the existing regulatory framework,” the FINMA stated.
As per the latest guidelines, financial service firms supervised by FINMA can only send cryptocurrencies or tokens to the wallet addresses of their own customers who have already been verified to receive such funds. However, they are not authorized to send or receive cryptocurrencies or tokens from users of other institutions.
This practice applies as long as information about the sender and recipient cannot be transmitted reliably in the respective payment system, FINMA concludes.
Switzerland’s approach to promoting the growth of cryptocurrencies and blockchain while implementing measures to keep a check on money-laundering is a good example for countries that are still struggling with the question of how to regulate cryptocurrencies.