Bitcoin Banks Get the Thumbs-Up from Switzerland
although they must adhere to strict AML measures.A seismic shift in the cryptocurrency ecosystem may be on the horizon. For the first time ever, financial regulators in Switzerland have given approval to the creation of Bitcoin banks. This integration of the fiat and crypto worlds could have a profound impact on the mainstream adoption of virtual currencies going forward.Switzerland Staying on the Cryptocurrency Forefront.
The Swiss Financial Market Supervisory Authority (FINMA) gave provisional banking and securities dealer licenses yesterday to two Bitcoin banks: Sygnum and SEBA. Both banks were able to convince FINMA that they could combine mainstream finance with cryptocurrency in a safe and reliable manner. Once both banks complete some regulatory steps, they will become official banks. Sygnum is registered in Zurich while SEBA is registered in Zug. SEBA is expected to officially begin business in October, just a scant few weeks away. Sygnum already has its own digital payment token for making trades on its platform, and this token is backed by Swiss francs.
Both banks will have to follow some strict anti-money laundering guidelines from FINMA. The regulatory agency has issued a guidance paper that notes the innovative nature of blockchain and cryptocurrencies while stressing it wishes to apply the necessary laws in a “technology-neutral” manner. FINMA does state that blockchain-based businesses must adhere to the regulatory framework already in place in Switzerland.
The report of the creation of the first-ever Bitcoin banks has been met with a good deal of approval. Many are hoping that this development will lead to more cryptocurrency banks being given the thumbs-up in the future.
Luka Müller-Studer of NME Legal AG says:
Today’s licence announcement is a game-changer. By methodologically incorporating digital assets into traditional banking, and injecting much needed DLT-driven agility, Sygnum is accelerating the development of an important new asset class.
Manuel Krieger, CEO of Sygnum Switzerland, notes the blossoming potential of this development, saying:
We now have a responsibility as an enabling platform to help banks and other financial players make the step into the digital asset world.
Mathias Imbach, an executive with Sygnum’s operation in Singapore, adds. “Cryptocurrencies will come out of the shadows if dealing with these assets can be done in a 100% compliant manner upholding all the rules that a strict regulator demands. That is a game changer.” SEBA Chairman of the Board Andreas Amschwand echoed the groundbreaking nature of Switzerland giving the okay to the two Bitcoin banks,
The banking licence of the Swiss Financial Market Authority FINMA is not only a milestone for SEBA, it sets a new standard for banking in the blockchain and digital asset economy. This moment has significance far beyond the Swiss financial industry.
Zug, Switzerland has become known as Crypto Valley.
Switzerland stands as a marked contrast to some other countries, such as the United States, in embracing blockchain technology and virtual currencies. The country has been quite welcoming to the new technology, as is evident with Zug being dubbed “Crypto Valley” due to the large number of crypto-based businesses that have set up shop in the area. A perfect example of this contrast is Facebook’s new crypto – the Libra. Facebook chose Switzerland as the home of the foundation created to oversee the Libra, while in the United States, quite a few senators and representatives have railed against the new crypto. In fact, Representative Brad Sherman (D-California) called Libra a greater threat to the United States than Al-Qaeda terrorist Osama bin Laden.
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