FINMA, the financial regulatory agency in Switzerland, recently approved 2 requests to issue banking licenses from blockchain businesses. This comes at an important time since blockchain projects from all around the world look for guidance and approval for such licenses.
Other jurisdictions are not going to be directly impacted by the regulatory strides in Switzerland. However, the way in which regulation is formed will be impacted.
The 2 banking licenses were issued by FINMA to SEBA Crypto AG and Sygnum AG, with extra stipulations listed. This was mostly connected to VASPs (Virtual Asset Service Providers), which is a term that refers to the blockchain service providers, like trading platforms, wallet providers and crypto exchanges. With the guidance, the government is fighting money laundering in the same way it does to service providers and DLT businesses.
FINMA stated that businesses have to verify customer identity, establish beneficial owner identity and monitor business relationships through a proper risk-based approach. At the same time, the businesses have to file a report with the MROS (Money Laundering Reporting Office Switzerland) whenever money laundering is suspected.
Both the projects approved try to deal with the gap between older, traditional financial aspects and DLT technology. Many projects tried to be the first that successfully blend them but nobody succeeded so far. The 2 banking licenses offered represent a precedent for the blockchain-based businesses in the area.
SEBA Crypto AG deals with asset management to then start a long-term scope including storage custody and transaction banking services.
Sygnum AG tries to offer wealth management and traditional banking services while using DLT and blockchain technology. This includes tokenized transactions, credit, brokerage and asset management.