Switzerland's Financial Market Supervisory Authority (FINMA), the country's financial regulator, announced yesterday, December 3, a series of new, "relaxed" requirements for blockchain- and cryptocurrency-based firms applying for a FinTech license. The regulator is moving forward with the goal of promoting innovation in the FinTech sector and removing barriers to market entry for FinTech firms.
Beginning January 1, 2019, FINMA, which is responsible for granting the FinTech license, will supervise firms subject to the relaxed requirements. An official statement explained: "Upon receiving license applications, FINMA assesses whether the intended business activities require a license and whether the planned business activities are possible under the terms of the FinTech license."
FINMA will inform the applicant which FINMA staff member is responsible for the procedure and whether any additional information or documents need to be submitted. In order to receive a FinTech license, a company must meet two specific conditions: Firstly, the company has to be "limited by shares, a corporation with unlimited partners, or a liability company," and secondly, the company "must have its registered office and conduct its business activities in Switzerland."
The official statement also includes a set of official guidelines meant to make the application process for licensees easier, detailing what information needs to be given to FINMA. This includes the reasons for applying for the license, a description of the proposed business activity, and a business plan with a "budget (balance sheet, income statement) for the next three financial years with optimistic, realistic, and pessimistic scenarios."
The FinTech license allows institutions to accept public deposits of up to 100 million Swiss francs, around $100 million. The terms of the license, however, stipulate that the companies are neither allowed to invest the public deposits nor pay interest on them. This was part of an amendment to the Swiss Banking Act, which was proposed in December 2016 and approved for January 1, 2019.
In January 2018, Johann Schneider-Ammann, Switzerland's economic minister, stated that the country should strive to become Europe's "crypto-nation," and saw cryptocurrencies as comprising "part of the fourth industrial revolution." The revamped requirements are another item on FINMA's list of efforts to lead the way on standardized practices and regulations for Switzerland's blockchain and cryptocurrency firms.