On February 7, an anti-money laundering regulation provision was released by (FINMA) the Swiss Financial Market Supervisory Authority.
In order for additional risks to be reduced, the margin of crypto exchange’s remaining anonymous transactions, are now to be reduced from 5,000 CHF to 1,000 CHF, which is about $1,020. The new changes are the result of the passing of recent executions from the Financial Institution Act and Financial Services Act on January 1.
FINMA came out with the revised ordinance in order to respond to these new acts. Consultations on what’s should be done next will be held until the date of April 9.
Trying to Comply with FATF’s Directives
One of the most important changes in this Swiss provision is normalizing the national regulations in the country with the directives released in June 2019 by the Financial Action Task Force (FATF). FATF is the international regulator that has imposed the $1,000 maximum limit for anonymous crypto exchange transactions.
All this means that from now on, financial providers offering crypto services will have to gather information on any person or entity that initiates operations of over $1,000. The authorities need to regularly receive information reports with this type of activities.
Stricter Anti-Money Regulation at a Global Level
The FINMA initiative is only a small part of what happens in the anti-money laundering regulation sector at a global level. By implementing this new rule, the Swiss regulator is acknowledging that anti-money laundering (AML) risks have increased in the crypto space, a FINMA press release says.
Let’s not forget that the EU has implemented this year the 5th Anti Money Laundering Directive, also known as AMLD5. AMLD5 addresses certain types of crypto transactions and mentions clearly that information on crypto exchange customers needs to be reported to authorities.
Author: Oana Ularu
The major Swiss wealth management and private banking group Julius Baer just launched, in partnership with Seba, its new custodial and trading cryptocurrency services.
The announcement was made on January 21, after the minority equity stake acquisition from 2018 and the partnership closed with Seba Bank AG, which happened back in February 2019. According to the announcement, Julius Baer’s entrance into the crypto space has been postponed because Seba had to be regulated.
Julius Baer Says Crypto Services Are in Increasing Demand
While not too many details on the offering have been given yet, it’s very likely Seba’s capabilities and platform are going to be used. In order to meet the rising need, Julius Baer will offer services such as crypto transaction solutions, custody of digital assets and overviews on a consolidated portfolio for both digital and traditional assets. According to their security, liquidity and technical robustness, the bank is going to select the most important cryptocurrencies. It hasn’t yet mentioned anything about the offered assets.
Seba is Fully Regulated
Seba was given its FINMA license at the same time with Sygnum. Back in December 2019, it started offering services to accredited and institutional investors from 9 new countries. It provides a wallet app plus banking and card facilities for more than 5 of the most important cryptocurrencies, such as Bitcoin (BTC), Litecoin (LTC), Ether (ETH), Ether Classic (ETC) and Stellar (XLM).
Seba investors are also offered crypto to fiat and crypto to crypto conversion services. Furthermore, the bank gives enterprise accounts to blockchain companies and their employees. As reported, Sygnum is too looking to expand globally, as it’s in talk with regulators to obtain a license for banking in Singapore.
Blockchain Technology Can Change the Financial Services Game
Back in the fall of 2019, the chief strategist and head of research and investment solutions at Julius Baer, Christian Gattiker-Ericsson, said cryptocurrencies are in a “Darwinian” selection process, with the winner remaining to be determined. He also noted that blockchain technology can change the game when it comes to financial services.
Author: Oana Ularu
It may not be the time yet to have an electronic Swiss Franc for the population. The Swiss government considers that there are more risks than benefits in this digital currency that could eventually destabilize the financial system. This is despite the friendly position that the country has towards cryptocurrencies and blockchain technology.
No Electronic Swiss Franc For General Use
In a recent report released by The Federal Council, they analyzed the different opportunities and risks related to the creation of a digital Franc. At the moment, the risks outweigh the benefits of such a currency considering they could have a negative effect on financial stability.
The analysis was based on the creation of a digital currency that would be available to the general public and that it would be complementary to other existing forms of central bank money.
As the report explains, there are other countries that are exploring the possibility to issue a digital currency based on their local fiat currency. These countries include Sweden and China, however, there are no clear roadmaps about which could be the next steps before being able to use a Central Bank Digital Currency (CBDC).
Some of the benefits of CBDCs include better access to payment and financial services for users and easy access to money that is free of default risk. Moreover, it could be possible for monetary policies to become more efficient over time while reducing tax evasion and money laundering.
However, the government considers that digital currency for financial market players could be a much more promising strategy.
It is also worth mentioning that Christine Lagarde, the president of the European Central Bank (ECB) said that they should be ahead of the curve in terms of stablecoins and digital currencies because there is a demand that the ECB has to address.
Author: Carl T
Deutsche Boerse and Swisscom, the German securities marketplace and Swiss telecom that’s run by the state, have just settled security transactions via blockchain protocols.
On November 19th, Deutsche Boerse made an official announcement that it initiated a proof-of-concept (PoC) with Swisscom. The PoC involved a few banks and had participants exchanging money as tokens and against tokenized shares.
This joint PoC is blockchain-based and meant to show how much potential new technologies bring when it comes to financial services. More than this, it keeps Germany and Switzerland active in the space of digital assets.
The Joint PoC Had Three of the Most Important Swiss Banks Participating
The banks involved in the PoC were among the major ones in Switzerland, such as Zuercher Kantonalbank, Falcon Private Bank and Vontobel.
They all acted as counterparties and exchanged securities tokens against cash ones. The Swiss National Bank was also indirectly involved, seeing the cash tokens have been deposited as collateral in its Eurex Clearing account. Deutsche Boerse provided Swiss francs cash tokens.
The Cross-Chain Secure Settlement Used Corda and Hyperledger
For the cash and securities tokens to be processed, the participants in the PoC deployed Corda from R3 and Hyperledger Fabric from IBM distributed ledger technologies (DLT), completing the cross-chain security settlement. Some other participants partnered up with the blockchain company Daura and with Custodigit, which is a venture held in custody by Sygnum and Swisscom.
Deutsche Boerse noted that all firms provided digital share registry core elements for the PoC. This initiative is another breakthrough in the blockchain-based collaboration between Deutsche Boerse and Swisscom.
The two companies partnered up with Sygnum, the fintech firm based in Singapore, earlier this year. The aim of this partnership is to develop a proper infrastructure for the digital assets financial market.
Author: Oana Ularu
Swiss National Bank (SNB), Switzerland’s central bank, together with Bank for International Settlements (BIS) are jointly exploring on how a central bank digital currency (CBDC) can be used to trade tokenized assets, the Block reports. Bank for International Settlements (BIS) acts as the central bank for other central banks in the world.
In a press statement, the SNB stated that it had already inked an operational contract with BIS and the two will launch a hub in Switzerland whose main mandate is to explore the possibility of a central bank issued digital currency in the country.
According to the press statement, the new type of central bank currency will aim at aiding the settlement of tokenized assets among various financial institutions. At the moment, the project is creating a proof of concept together with SIX Digital Exchange (SDX) which is a subsidiary of SIX stock exchange.
In a separate press statement released by SIX, the new project by SDX will seek to come up with a platform that will explore the technical options of digitizing the Swiss franc on the SDX blockchain platform. The project will also look at the possibilities of linking the Swiss Interbank Clearing System on the SDX platform.
SDX explained that distributed ledger-based tokenized assets, as well as a central bank issued digital money, will reduce counterparty risk and free financial innovations.
The head securities and exchanges at SIX, Thomas Zeeb, explained that their proof of concept about a central bank-issued digital currency for use by various participants on DLT platforms will open up technological advancement and encourage different market participants to explore the DLT technology as well as digital assets.
In the recent past SIX has been a crucial player in financial innovation and has listed various crypto-based exchange-traded assets. Just last week, a fintech-based company Amun AG stated that it had successfully listed a Bitcoin and Ether ETP that will be denominated through the Swiss franc on SIX exchange. In addition, Six is set to launch its own digital assets exchange after the release of a prototype platform in September this year.
Author: Joseph Kibe
Central Bank Digital Currencies (CBDCs) are an important subject in Switzerland right now. The Swiss National Bank (SNB) has recently started a partnership with the Bank for International Settlements (BIS) to begin a study on CBDCs, which will be conducted at the BIS Innovation Hub Center, which is based in Switzerland.
According to the latest announcement made by the banks, this will be one of the three hubs that will be established to research more about the project. The other two will be set in Hong Kong and Singapore.
The focus of the Swiss center will be on how to integrate CBDCs to the blockchain and to analyze the requirements for tracking electronic markets, which are much faster than their non-digital counterparts. The first joint project will be a proof of concept about how to release a CBDC in the country that could facilitate the settlements between financial organizations.
Another important goal of the researchers is to identify more insights and important trends of the technology that can be used by the experts of the bank to innovate in the creation of solutions.
The chairman of the SNB, Thomas Jordan, affirmed that the central bank is following the trend of the market closely and that it is important to cooperate with other banks and the financial sector to develop.
Right now, Switzerland is still unconvinced of CBDCs, but willing to learn more. Jordan recently claimed that stablecoins could hurt the country’s monetary policies and that access to a CBDC could result in a negative outcome. Despite this stance, however, the country seems willing to learn more about the technology before completely disregarding it.
Author: Denis Miriti
Peter Wuffli, known as the former CEO of the largest Swiss bank, UBS, has recently affirmed that his new crypto bank called Sygnum could be used to tap into the crypto market more deeply. According to him, there is a $220 billion market to be explored, as many individuals and institutions who already own cryptos could use a bank.
He has also shown some excitement concerning the fact that crypto assets have plenty of potential to be explored. The market is still very young and Wuffli believes that several solutions can be offered to clients such as custody, trading and loans.
Wuffli has noted that tokenization is another great opportunity. In this digital age, several companies have the opportunity to tokenize their shares or other important assets such as real estate.
The only aspect that gets in the way of this is that there is still no clear regulation for the industry. Wuffli affirmed that the blockchain brings a lot to the table, but that some uncertainty is still there.
According to him, one of the main aspects of blockchain that will help companies beyond tokenization is that they can be used to simplify processes. You can simply abandon spreadsheets and complex systems. Using blockchain solves several uses and decentralizes the system.
However, he has also noted that “corporate currencies” are not completely using the potential of blockchain, which can be used for market democratization. He was very skeptical about Facebook’s new Libra asset, for instance, which is seen as a corporate currency instead of something that will really democratize the economy.
Author: Gabriel Machado
SIX, a well-known Swiss stock exchange, has recently decided to launch a pilot version of its platform. The prototype, which was launched by SIX Digital Exchange, a subsidiary of the company, is focused on digital assets and to act as a central securities depository.
According to the company, the full launch is expected to happen during the last quarter of 2020 and it will be representative of the future of financial markets. The beta launch, which is happening now, was made to get some feedback from testers before the platform is fully ready for the launch.
The company intends to show to the world that the blockchain can be used to create a central securities depository that will integrate a centralized order book with decentralized technology to create a fair market.
The chairman of SDX, Thomas Zeeb, affirmed that the launch of this project is a major milestone for the creation of the digital infrastructure that is needed to move the industry forward. Initially, the platform will be created to issue digital securities, for live trading and instant settlements. It will also use a structure that is very similar to SIX’s.
Zeeb affirmed that the ultimate goal of the new platform is to use let the users settle their trades instantly with no counterparty risk.
This, he affirmed, will speed things up. If both sides have what it takes for the trade and they want to do it, the settlement happens instantaneously. He also affirmed that the next phase of the project will be rolled out soon.
Author: Hank Klinger
Swiss financial markets watchdog (FINMA) says it is ready for international cooperation as well as oversight on modalities to regulate the expected Facebook’s crypto project, Libra.
Speaking in an interview with a local media outlet Neue Zürcher Zeitung (NZZ), FINMA director Mark Branson explained that it was difficult for a solitary country to regulate a project of Libra’s magnitude and there was a need for the international community to cooperate.
Branson explained that while majority of regulators have described Libra as controversial, it is not the role of FINMA to expedite the fulfilment of the project. He said that the role of the watchdog is to explain as well as apply the laws and rules as they exist.
The director also stated that if his country was to achieve its objective of becoming a crucial financial hub in the world, it will have to cope with the various risks that emanate from working with big projects like Libra that attract international attention.
Branson stated that major finance projects like Libra are linked with reputational risks and is the case in the entire world. He however said that Switzerland should not settle for second-class financial hub in order to avoid such risks. According to the FINMA director, the decisive factor should be if the country has the right legal and regulations regime as well as supervision to deal with such players in the industry.
Although Libra has come under immense attack and pressure from different quarters who view it as a financial risk, Branson stated that FINMA was not under any pressure to use stringent rules on Libra. He explained that Libra has huge ambitions and that FINMA did not require any international pressure to realize this, pointing to the successful and large corporations behind the project.
According to CoinDesk over the last couple of weeks, lawmakers and policy makers from the US have travelled to Switzerland to discuss the Libra project and the expected regulation of the project. One of them is Maxine Waters who is the chair of the House Financial Services Committee who stated that there were doubts about the Libra project after holding talks with the Swiss regulators.
Author: Joseph Kibe
Maerki Baumann, a Swiss private bank, has recently affirmed that 400 new clients are currently interested in crypto and blockchain offerings. According to the bank, which is based in Zurich and has around $8.2 billion USD under its management, the blockchain is the way to “rejuvenate” the business.
The CEO of the company, Stephen Zwahlen, affirmed that the bank is used to looking for clients, so they were surprised when around 400 clients knocked on their doors wanting to invest in crypto.
Most of them were between 30 and 40 years and struggled to access the financial world. Now, they wanted a shot at it and believed that Bitcoin could be their investment.
According to Zwahlen, the bank is now looking to become the go-to private bank when it comes to crypto investments. Most banks do not support the technology but he believes that the nascent industry can bring a lot of benefits for the institution and its clients.
Now that the company has been properly approved to offer crypto services, it is looking to establish the right partnerships that could help it to offer the best products for its clients.
The CEO affirms that the third part of the plan will be to advise the clients and manage their resources in the blockchain market. According to him, big demand is expected, as crypto assets will be significantly more important in the future and are maybe even surpassing the more traditional ones.
However, the company will not be dealing directly with Bitcoin. Instead, it will outsource crypto trading, clearing, and settlement and only manage it via third-parties.
Author: Gabriel Machado