FINMA publishes Stablecoin Guidance (Guidance 06/2024)

FINMA further lists the requirements and risks of a default guarantee from a bank which is often used by stablecoin issuers to avoid a banking license.

These guidelines reflect FINMA’s current practice including the requirements that all customers must have their own claim against the Swiss bank issuing the default guarantee and that the claim against the bank must be due at the time of insolvency.

As stablecoin holders do not profit from deposit protection, the level of protection with a bank default guarantee is lower than with a banking license.

FINMA further emphasizes the additional operational risks in case of several default guarantees as well as the reputational risks for banks providing such guarantees.

Impact and actions

• The prohibition of anonymous transfers of stablecoins does not necessarily mean that the issuer itself needs to identify and verify each stablecoin holder at any point in time. However, contractual and technological restrictions are required to ensure compliance with Swiss anti-money laundering regulations (e.g. whitelisting; transfers only to other VASPs subject to AML regulation).
• The prohibition of anonymous transfers of stablecoins will be a major barrier in terms of their use in DeFi.
• Using default guarantees to avoid a banking license may not be the safest way forward: FINMA states that the use of default guarantees should be further addressed in its upcoming discussions as well as when reviewing the Swiss Banking Ordinance providing for such exception.