It’s an early domino, but it’s dropped nonetheless.
On August 26th, the Swiss Financial Market Supervisory Authority (FINMA) — Switzerland’s top financial regulator — revealed it had granted banking and securities licenses to two domestic blockchain companies, the Zug-based SEBA Crypto AG and the Zurich-based Sygnum AG.
First and foremost, the licenses will allow the firms to expand blockchain-centric services to mainstream clientele, particularly institutional customers.
In announcing the licenses, FINMA simultaneously published new anti-money laundering (AML) guidelines for blockchain companies operating in Switzerland. The government regulator said new rules weren’t needed for blockchain tech, merely the application of reigning laws:
“However, blockchain-based business models cannot be allowed to circumvent the existing regulatory framework. This applies particularly to the rules for combating money laundering and terrorist financing, where the inherent anonymity of blockchain technology presents increased risks.”
Notably, SEBA Crypto Chairman Andreas Amschwand hailed FINMA’s unprecedented approval as a milestone for the cryptoeconomy as a whole:
“The banking licence of the Swiss Financial Market Authority FINMA is not only a milestone for SEBA, it sets a new standard for banking in the Blockchain and digital asset economy. This moment has significance far beyond the Swiss financial industry.”
No Crypto Transfers Without AML Details
As a preview of what cryptocurrency usage in mainstream banking contexts might increasingly look like in the coming years, blockchain service users in Switzerland will need to have identifying Know Your Customer (KYC) information sent along with transactions between regulated companies.
“As for traditional bank transfers, information about the client and the beneficiary must be transmitted with transfers of tokens,” FINMA said.
In its Monday announcement, the Swiss watchdog noted its newly published blockchain finance guidelines came as part of the agency’s bid to comply with the Financial Action Task Force (FATF), a G20-backed body that published tough new AML rules for cryptocurrency companies this summer.
More than 200 countries are set to follow those FATF rules, and FINMA clearly isn’t waiting around to when it comes to such compliance.
You Might Already Recognize SEBA Crypto
Last fall, SEBA Crypto announced it had raised just over $100 million USD to fund its effort to build out a cryptocurrency bank. At the time, the firm said it was working with FINMA to achieve banking and securities licenses, a goal that officially came to fruition as of this week.
For now, the company will continue trying to further its mission of becoming a one-stop crypto business hub, with services ranging from financing to consulting. Cryptoeconomy natives and mainstream users are both being eye by the firm.
“With safety, transparency and performance as core values, our ambition is to become a market leader in the convergence of traditional finance with the crypto economy,” the company’s CEO Guido Buehler said last September.
Interesting Wrinkle: U.S. and Swiss Authorities Meet on Facebook Libra
When Facebook announced its planned Libra stablecoin project this summer, the reveal set off a regulatory firestorm across the globe. Many international authorities have been blitzing to provide oversight on the initiative ever since.
The latest happening in that thread took place over the last week, when U.S. Representative Maxine Waters (D-CA) led a bipartisan delegation to Switzerland where the Libra stablecoin’s backing association is headquartered. While there, Rep. Waters and her colleagues met with various Swiss regulators, including FINMA, pressed on and maintained her concerns over “allowing a large tech company to create a privately controlled, alternative global currency.”
In any case, the congresswoman and her peers intend to keep the heat on.
“I look forward to continuing our Congressional delegation, examining these issues, money laundering, and other matters within the [House of Representatives’ Financial Services] Committee’s jurisdiction,” Rep. Waters said.
The post A First: Swiss Watchdog Grants Banking Licenses to Blockchain Companies appeared first on Blockonomi.