The Swiss Financial Market Supervisory Authority (FINMA) has announced on Monday, December 3, that local blockchain and cryptocurrency startups can now apply for a new fintech license that would allow them to handle deposits of up to 100 million CHF ($100 million), just like traditional banks.
According to the official announcement, starting from January 1, 2019, companies other than banks can formally request to accept public funds of up to 100 million CHF as part of their business operations.
“The FinTech licence allows institutions to accept public deposits of up to CHF 100 million, provided that these are not invested and no interest is paid on them. A further requirement is that an institution with a FinTech licence must have its registered office and conduct its business activities in Switzerland,” the announcement reads.
In order to be granted a fintech license, companies must adhere to clear rules that dictate how they can handle customer money. For example, they may not re-invest any of it, nor can they pay interest on any assets received, at any time.
Businesses will also need to submit a veritable mountain of documentation to FINMA in support of their applications. This includes a satisfactory description of the proposed business activity, geographical scope, and target clientele. FINMA also requires full accountability of all board members, including addresses, educational records, CVs, any related criminal records, and even references from previous jobs.
To simplify the application process, FINMA, which will supervise these institutions, has published guidelines. Interested parties can also present their project to FINMA during a meeting prior to submitting the application.
The new license was made possible due to a recent amendment made to the Banking Act, made specifically to promote innovation within the cryptocurrency and blockchain sector.
This is seen as a necessary step forward for the cryptocurrency startups operating out of Switzerland‘s Crypto Valley, known as a tax haven for new blockchain businesses.
Last month, Switzerland’s major stock exchange SIX Swiss Exchange listed the world’s first crypto-based exchange-traded product (ETP). The product, dubbed the “Amun Crypto ETP,” tracks five major cryptocurrencies: Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), Bitcoin Cash (BCHABC), and Litecoin (LTC).