Switzerland’s Financial Market Supervisory Authority (FINMA) has published a supplement to its ICO guidelines outlining how it treats so-called ‘stablecoins’ under Swiss supervisory law.
As FINMA has received a request from the Geneva-based Libra Association for an assessment of its Libra project, this supplement gives an initial indication of how it would apply the relevant Swiss regulation. FINMA’s supervisory law for ‘stablecoins’ follows its existing approach for blockchain-based tokens, i.e. the focus is on the economic function and purpose of a token (‘substance over form’) and follows the tried and tested principle of ‘same risks, same rules’, while taking into account the specific features of each project. FINMA offers guidance for which law may apply to ‘stablecoins’ whether they are linked to: currencies, commodities, real estate, or securities.
Further, ’Stablecoin’ projects may give rise to potential licensing requirements.