Switzerland’s Financial Supervisory Authority (FINMA) has new planning in place which will allow cryptocurrency exchanges to behave like the country’s banks in that they will be able to hold public deposits of up to CHF 100 million (USD 100.5 million) under a new license available from next year.
An amendment to the country’s Banking Act by the forward-thinking and crypto friendly Swiss government has made this change to the way cryptocurrency exchanges do business. The changes have been introduced, according to the government, in order to make Switzerland a more inviting location for crypto business moving forward.
Conditions to the new law will apply as the funds held with exchanges up to CHF 100 million can’t be invested funds. Those wishing in obtaining the new license will need to contact FINMA with a broad outline of the scope of their business plan over the next three years with a clear indication on who the target customer will be.
All participants under the new licensing will be thoroughly checked by FINMA. All members of projects will be thoroughly vetted for criminal records and platforms interested in obtaining a license must also agree to a financial audit on reapplying in the future. Also, any overseas companies thinking of applying, for what is very close to bank status in terms of capital held, will need to register all participants with a holding of 5% or more in the company, the same requirement as Swiss nationals under the new cryptocurrency banking laws.
The world has now taken to looking to Switzerland for innovation, so yet another move to empower the industry hardly comes as a surprise. Only two weeks ago, Swiss stock exchange SIX, the fourth largest stock exchange in Europe with a market capitalization of USD 1.6 trillion, followed up on its commitment made back in June of this year to open its doors to cryptocurrencies. With this announcement, it is about to list the world’s first crypto-based exchange-traded product or ETF as it is known in the US. A feat attempted, but not yet achieved on the other side of the Atlantic.
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