A federation of three industry associations has published an official statement on the ongoing revision of the Swiss Financial Institutions Act (FINIG) - aiming to create clearer and more innovation-friendly regulatory conditions for crypto and blockchain providers.
A working group of the SBF, in close collaboration with the three associations Crypto Valley Association (CVA), the Swiss Fintech Association (SFTA) and the Capital Markets and Technology Association (CMTA), prepared the statement. The group generally welcomes the government’s initiative to introduce new licensing categories and a clearer legal framework for stablecoins, crypto institutions and payment service providers under FINIG. At the same time, it calls for the law to acknowledge the specific characteristics of distributed ledger technology (DLT) instead of forcing it into outdated financial structures. The aim is to create regulated, transparent and globally competitive conditions that preserve Switzerland’s position as a leading blockchain hub.
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Why the revision is necessary
The existing regulation was based on the “Fintech licence” introduced in 2018 - with significant restrictions such as the CHF 100 million limit for customer deposits. This ceiling has hampered growth, particularly for providers working with client funds or seeking to issue stablecoins.
The new proposal introduces two new licensing categories: “Payment Instrument Institutions” for entities issuing stablecoins or crypto-based payment instruments, and “Crypto-Institutions” for providers of custody, trading or market making in digital assets. This could legalise many activities that have so far existed in a grey area under Swiss law.
What the SBF is demanding
- Technological neutrality: Rules should not discriminate against blockchain technologies but should focus on outcomes and function - not the underlying technology.
- Proportionality: Requirements should be designed so as not to excessively hinder innovation, particularly for startup and mid-sized projects.
- Trust & transparency: Requirements for custody, reserve management, KYC and AML obligations must be clearly defined and enforceable - especially for stablecoins and custody services.
The SBF warns against automatically regulating crypto-assets like traditional financial instruments, as this could make many business models unworkable.
What is missing today
The statement criticises the lack of a strategic vision. The associations therefore demand that the proposal should - first and foremost - strengthen Switzerland’s competitiveness as a financial centre. Such a vision should build on Switzerland’s existing strengths, including:
- its high degree of legal certainty,
- the advanced institutional adoption of crypto business,
- as well as self-regulation.
The associations also emphasise that the global financial industry is undergoing a fundamental transformation. Innovative technologies such as artificial intelligence, distributed ledger technology (DLT) and digital identity are changing how financial services and products are created, distributed and managed.
“The direction is right. The Federal Council shows that it takes the realities of the digital financial market seriously. But the draft remains unclear in important areas. Without consistent guiding principles and a clear vision, Switzerland risks falling behind in international competition.” - Heinz Tännler, President of the Swiss Blockchain Federation
Stablecoins legally permissible again
The FINIG proposal creates a framework that finally allows the issuance of stablecoins from Switzerland. Stablecoins are virtual currencies tied to an official currency (e.g. US dollar or euro) through a stabilisation mechanism. Stablecoins have grown explosively, particularly in the dollar market. It is foreseeable that stablecoins in other currencies will also play a central role in payments and in the financial system. Currently, requirements for issuers are too strict to make the business viable at all.
The associations explicitly welcome that money laundering risks can be addressed, among other things, through the blocking of sanctioned addresses (“blacklisting”), but insist that this rule must apply to all types of stablecoins. They also strongly warn against allowing only one specific form of stablecoin, as this would significantly limit competition and innovation.
Furthermore, the associations criticise the requirement that banks should only be allowed to issue stablecoins via a separate payment instrument institution. Given the banks’ role as central players in the payment system, they see no factual justification for such an obligation.
The 14 improvement proposals of the SBF working group
The following 14 points summarise the areas where the expert group sees the greatest need for adjustment. They aim to create legal certainty, avoid duplication, correct impractical elements and ensure that innovation is not slowed by unnecessary regulatory hurdles. The points are based on a comprehensive analysis by the industry associations and reflect the central concerns of the sector.
- It remains unclear whether the regulatory perimeter of the licence for payment instrument institutions goes beyond that of today’s fintech licence.
- The payment instrument institution (as with current fintechs under Art. 1b BankA) presents a risk profile limited to operational risks.
- Banks should be allowed to issue stablecoins directly, without being required to set up a payment token entity.
- The issuance of other payment tokens must remain possible.
- The interest prohibition must be formulated more precisely to ensure that non-interest income models remain permitted.
- Coverage requirements must remain practical, including the ability to use SNB sight deposit accounts.
- In money laundering practice, clear legal bases are needed, for example regarding the admissibility of blacklisting (blocking and exclusion lists).
- Orientation toward the securities firm model is unsuitable, as the business models of crypto institutions involve different risks and processes.
- The regulatory perimeter must focus on custody, while client trading and market making should not automatically require authorisation.
- A two-tier supervisory system makes sense, with a supervisory organisation for smaller institutions (self-regulatory organisations - SROs) and FINMA supervising larger institutions.
- Due diligence obligations should apply only to crypto-assets with an investment character.
- The whitepaper requirement should be more clearly defined and used more broadly to create transparency without triggering unnecessary prospectus obligations.
- Consolidated supervision for foreign shareholdings is unnecessary and makes investments in Swiss providers more difficult.
- FINMA approval procedures must become faster and more predictable, with clear criteria and deadlines.
