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Switzerland’s New Stablecoin Guidelines: 3 Things You Should Know

The Swiss Financial Market Supervisory Authority (FINMA) issuednew guidelines for stablecoins added as a supplement to its existing guidelines for initial coin offerings (ICOs) to outline how stablecoins are treated under the Swiss supervisory law.

FINMA announced on Wednesday that stablecoins are classified under the existing approach of blockchain-based tokens. The regulatory framework for stablecoins may differ depending on their underlying assets that they are backed by, including currencies, commodities, real estate, and securities.

The outline focuses on the economic function and purpose of the token, with an emphasis on that the same risks and same rules apply. FINMA stated:

“The concrete design of ‘stable coins’ can vary greatly in legal, technical, functional, and economic terms. Therefore, no fully generic classification is possible. Money laundering, securities trading, banking, fund management, and financial infrastructure regulation can all be of relevance.”

FINMA’s approach to Libra

Regarding Facebook’s Libra, FINMA announced that the services provided by the Libra project would require a payment system license based on Switzerland’s Financial Market Infrastructure Act (FMIA).

“Due to the issuance of Libra payment tokens, the services planned by the Libra project would clearly go beyond those of a pure payment system and therefore be subject to such additional requirements.”

FINMA indicates that the Swiss payment system license would allow for a combination of banking and infrastructure regulatory provisions and that the conditions for Libra being granted a license would include:

“The returns and risks associated with the management of the reserve were borne entirely by the Libra Association and not — as in the case of a fund provider – by the ‘stable coin’ holders.”

An internationally coordinated approach would be ideal for Libra to establish the requirements of its reserve management, governance, and AML system.

Swiss SIX Exchange Launches Bitcoin and Ether Exchange-Traded Product

Fintech firm, Amun and crypto custodian Bitcoin Suisse and announced today of the launch of its Swiss Franc denominated Amun Bitcoin Suisse BTC/ETH exchange-traded product (ETP). This ETP, a combination of Bitcoin and Ether, has gone live on the Swiss stock exchange, SIX.

The launch of the ETP will allow Swiss investors to add BTC and ETH to their portfolios. The composition of the ETP is 90% BTC and 10% ETH. Trading on SIX, the ETP is under the ABBA ticker symbol.

As described by Amun AG, “this physically-backed ETP is fully collateralized, which means that for every Bitcoin and Ether bought for the ETP, there will be an equal corresponding crypto amount stored securely in the Bitcoin Suisse Vault.”

Hany Rashwan, the co-founder and CEO of Amun, stated that the product had been designed specifically for the Swiss by the Swiss to address the need for a Swiss Franc (CHF)-denominated ETP. He said,

“It represents a unique way for investors to add the two major cryptocurrencies globally to their portfolio via a regulated product listed on SIX and backed by a Swiss-based custodian.”

Post-launch, Amun AG has added the seventh cryptocurrency ETP listed on the Swiss SIX exchange.

SDX sets up a global consortium for its initial digital offering in 2020

The Swiss Digital Exchange (SDX) has been reportedly setting up a global consortium of financial institutions for its plan to launch its initial digital offering (IDO) in 2020.

The IDO was explained to be similar to a traditional initial public offering, although the shares will be issued in the form of security tokens on SDX. The launch of the SDX was postponed to Q4 of 2020.

Image via Shutterstock

Binance Partners with Amun to Launch BNB ETP on Swiss SIX Exchange

Cryptocurrency exchange Binance has partnered with Switzerland-based exchange-traded product (ETP) Amun to launch the Binance token (BNB) ETP. The BNB ETP is listed on the Swiss stock exchange, SIX under the ticker ABNB and is available for purchase through a bank or brokerage, like a stock.

Hany Rashwan, CEO of Amun said that the ETP will initially be backed by $20 million worth of BNB, accounting for almost a quarter of the firm’s total crypto assets under management.

Changpeng Zhao, CEO of Binance said in a statement:

“Our partnership with Amun in launching the BNB ETP will provide investors with a new and regulated asset class with a unique dimension to utility tokens, making them more accessible and reliable through a traditional financial infrastructure. This will provide traditional investors access with diversified exposure and segue into the global cryptocurrency market and its innovative products.”

BNB has been addressed as a utility token by Binance, however, the ABNB is an ETP which is a security, opening up to investors to buy into the “Binance ecosystem” without directly holding the exchange’s native token.

Rashwan added, “we are so excited to partner up with the world’s largest crypto exchange and make their native token accessible to institutional and retail investors in a secure, affordable, and regulated Swiss exchange-traded product.”

Stocks image via Shutterstock

Swiss City Lugano Partners with Tether to Adopt Crypto Tax Payments

The City of Lugano in Switzerland has entered into a partnership with Tether Operations Limited to drive its technological advancement while enabling its capabilities to allow its residents to pay their taxes through cryptocurrencies.

Per the announcement from the duo, the partnership will help to establish a centre of excellence for blockchain adoption in Europe while helping to scale Lugano’s blockchain infrastructure as it looks to become a key hub for the new technology in the European Union.

“Lugano is investing in its future,” said Michele Foletti, Mayor of Lugano. “In recent years, the city has already implemented blockchain-based solutions including the MyLugano app and its LVGA Points payment token, the Lugano digital franc, and the 3Achain blockchain infrastructure. We strongly believe in this technology, the potential to scale the technology, – and our integrated collaboration with Tether – will build a better and more open, transparent, and smart city.”

The partnership will see Tether support the city at its forthcoming event dubbed the “Bitcoin World Summit” in October this year with the theme bordering on the deep conversations around freedom of communication and finance as aspects that are the targets of revolution for blockchain innovations.

Tether will equally help the City of Lugano to transform the flexibility of its businesses so that they will start accepting stablecoins as a means of payment for their services. As the world’s largest stablecoin issuer, Tether will provide the technological infrastructure to make this and more targeted innovations happen across the board.

According to the announcement, the “Lightning Network will be one of the solutions that the City, with the support of Tether, will integrate into the services. Lightning Network has grown to become a prominent, highly scalable, and robust payment system overcoming scalability obstacles associated with the blockchain without surrendering security, trustlessness, or privacy.”

As noted, the partnerships will also feature the payment of annual taxes in crypto with formal approvals secured for Bitcoin, Tether, and select CHF-based stablecoins. The Lugano-Tether tax deal mimics a similar push by the US State of Colorado which plans to start accepting payments for tax through crypto this summer.

McDonald's in Swiss Town Accepts Crypto Payments in BTC & USDT

Multinational fast food chain giant McDonald’s now accepts Bitcoin and USDT as payment methods in the southern Swiss city of Lugano (Lugano).

Residents of the city of Lugano can order food using a McDonald’s digital kiosk and then pay at the regular check-in desk with the help of a mobile app.

Apart from crypto payments, this region also supports cryptocurrency payments for taxes, parking tickets, public services, and student tuition in the local community.

The City of Lugano has announced the acceptance of Bitcoin, Tether and LVGA tokens as legal tender. The local authority intends to allow residents to settle their annual tax bills and pay for goods and services in cryptocurrencies, with only Bitcoin, USDT and a certain Swiss franc-pegged Stablecoin for payments.

Lugano, a city of 63,000 in Italian-speaking Switzerland, announced in March that it would be one of the first cities in the world to introduce a full cryptocurrency payments economy. More than 200 stores and businesses are expected to accept crypto payments for goods and services.

To that end, Tether and Lugano will collaborate to make the city a major hub for blockchain adoption across Europe.

Likewise, McDonald’s has begun accepting Bitcoin as a payment option in El Salvador after the nation became the first to adopt the cryptocurrency as legal tender on September 7 in 2021.

McDonald’s customers in El Salvador can now pay for Big Macs and other items on the menu with bitcoin at all 19 McDonald’s locations in the country, as well as online and through delivery apps.