Overview of Cryptocurrency Asset Regulation Series (13): Switzerland, Banking Licenses, Stablecoins, and On-Chain Securities

▌ Introduction

When mentioning the Swiss cryptocurrency industry, many people think of Zug's "Crypto Valley." However, when companies are ready to conduct business there, questions quickly become specific: Who supervises the currency exchange for clients? Do the assets held in wallets count as deposits? What licenses are needed to issue stablecoins?

Switzerland's approach is to fit different businesses back into existing financial laws and then supplement them with rules for securities registration, trading facilities, and bankruptcy handling concerning distributed ledgers. Therefore, a company's compliance path often begins with how funds and assets actually flow. Where does the client's money go, who can operate the wallet, and who does the client ultimately request a return from will all affect the judgment.

This issue will outline the main regulatory bodies, licenses, stablecoins, and custody rules in the order of how companies enter the market. The text also retains legal references for readers to check the original text. The information verification is up to November 2, 2026, with separate notes on parts involving legislative proposals.

▌ 1. First, Place the Business in the Right Position

The Swiss Financial Market Supervisory Authority (FINMA) is responsible for licensing and supervising banks, securities institutions, and financial market infrastructures. When cryptocurrency businesses touch on corresponding activities, they will also enter these systems. The Swiss National Bank, responsible for monetary policy and certain systemically important financial infrastructures, has a different division of responsibilities.

Some companies engaged in exchange, transfer, or other financial intermediary activities mainly accept anti-money laundering supervision by joining self-regulatory organizations recognized by FINMA. These self-regulatory organizations, commonly referred to as SROs, supervise members in client identification, fund review, and related organizational arrangements. Companies first need to confirm what type of activities they are engaged in before determining which regulatory path to follow.

For example, one company exchanges fiat currency for Bitcoin on behalf of clients and charges a service fee; another company pools client funds into an account, promising to return them at any time; and yet another company organizes multi-party transactions for security tokens. These three types of businesses handle client assets differently, and the anti-money laundering, deposit acceptance, and trading facility rules involved will also differ.

FINMA's classification of tokens is similarly functional. Payment tokens are used to transfer value, asset tokens represent economic rights such as debts and equities, and utility tokens provide access to applications or services. When a token has multiple functions, the applicable rules must be judged based on its actual rights and uses.

When preparing materials, companies can start by writing a business description: who the clients are, how funds enter, how tokens are delivered, who holds operational authority, and how clients settle upon exit. Then, link each step to the relevant laws. This is easier than merely asking about licenses with product names like "wallet" or "Web3 platform," as it allows for clearer regulatory feedback.

The business process determines the licensing paths that require further review.

▌ 2. What Types of Business Suit FinTech Licenses

Article 1b of the Swiss Banking Act establishes the FinTech licensing path. FINMA publicly states that relevant institutions can accept up to 100 million Swiss francs in public deposits or accept compliant cryptocurrency assets within certain conditions; the accepted assets must comply with restrictions such as not being invested or paying interest. The scope of cryptocurrency assets must also be judged in conjunction with Article 5a of the Banking Ordinance.

Here, a business issue can easily arise. If a company wants to first collect client funds and then complete payments or exchanges upon client instructions, such arrangements can consider the FinTech path; if it plans to lend, invest, and earn interest on the received funds, it will need to reassess the requirements for a banking license. The intended use of funds in the business plan directly affects the available paths.

The applicant must comply with the company form stipulated by Swiss law and establish a registered office and conduct business activities in Switzerland. Regulators will continue to review governance, personnel, internal controls, audits, and arrangements for funds and client assets. For cross-border teams, it is especially necessary to clarify how local Swiss management participates in decision-making and how technology and operations outsourcing are managed.

Client protection also has clear disclosure requirements. Article 1b, paragraph 4(d) of the Banking Act and Article 7a, paragraph 3 of the Banking Ordinance require informing clients of the corresponding risks. FINMA specifically reminds that in the event of bankruptcy of a FinTech institution, client assets do not enjoy the priority protection and deposit insurance under the banking license. Client contracts and promotional materials need to clarify this point.

AI generated illustration

Therefore, when companies compare banking licenses with FinTech licenses, it is best to also compare business permissions, fund usage methods, and client rights. Existing FinTech licenses allow companies to conduct specific activities, and product designs must align with these conditions. Listing future business expansions in advance can reduce the costs of frequent structural adjustments after going live.

▌ 3. How to Conduct Currency Exchange and Wallet Business in Anti-Money Laundering

Article 2, paragraph 3 of the Anti-Money Laundering Act covers various financial intermediary activities, while Article 14 stipulates the requirements for joining corresponding self-regulatory organizations. In FINMA's explanation of cryptocurrency businesses, the exchange of fiat currency for cryptocurrency, exchanges between different cryptocurrencies, and wallet transfer services with relevant operational authority may all fall under anti-money laundering supervision.

In practice, companies must establish processes for client identification, beneficial owner verification, understanding transaction purposes, and risk classification. The corresponding basic references include Articles 3, 4, 6, and 7 of the Anti-Money Laundering Act, which involve identity verification, beneficial ownership, special clarification obligations, and record-keeping. In cases of statutory suspicious circumstances, Article 9's reporting obligations also apply.

Wallet transfers will also encounter issues of information transmission with transactions. FINMA's regulatory guidance 02/2019 discusses the requirements for blockchain payments and also involves identity and control verification when transferring to external wallets. Companies need to know whether the counterparty is a regulated service provider or the client's own external wallet and then configure appropriate verification methods.

For technical teams, these requirements will specifically translate into account opening fields, approval permissions, address verification, and exception work orders. Legal provides judgment criteria, operations collect materials according to processes, and technical systems retain key records. It is best for all parties to use the same business process diagram to avoid situations where contracts promise audits, but the system lacks corresponding operational entries.

If a company plans to conduct both exchange and custody simultaneously, it also needs to separately explain how client assets are safeguarded, whether they can be delivered at any time, and whether the company has obtained other usage rights. Anti-money laundering supervision addresses corresponding financial intermediary obligations, while asset custody and business models must continue to be reviewed against banking laws and other rules.

▌ 4. What Rights Do Holders Have Regarding Stablecoins

The legal treatment of stablecoins in Switzerland depends on what rights holders have against whom and who bears the reserve risk. FINMA's guidance 06/2024 focuses on these issues. Arrangements allowing holders to redeem at a fixed value from the issuer may involve public deposits; if the investment risk is borne by the holders, the collective investment system must also be assessed.

Check the specific structure against FINMA's guidance 06/2024.

For issuers wishing to adopt a bank guarantee structure, Article 5, paragraph 3(f) of the Banking Ordinance is an important reference. Under certain conditions, a bank's default guarantee may allow the relevant funds to qualify for exceptions under the public deposit definition. When adopting this path, issuers and guaranteeing banks need to clearly articulate the rights of holders.

FINMA's requirements include: each holder must be able to directly assert rights against the guaranteeing bank, the guarantee must cover the corresponding deposits, the limit must be sufficient to continuously cover, the procedure for applying for guarantee payments must be easy to implement, and the defenses of the guaranteeing bank must meet requirements. Whether new holders can exercise rights after the token is transferred in the secondary market must also be addressed in the contract design.

This structure has practical implications for the issuance scale. When tokens are continuously issued, the guarantee limits and coverage must keep pace; changes in the bank or guarantee agreements may also affect holders' rights. The four stages of issuance, reserves, guarantees, and redemptions must be able to verify each other.

Anti-money laundering requirements will also permeate circulation arrangements. Issuers need to identify holders in accordance with the guidance and consider transfer restrictions and specific technical measures. If a company wishes to create a payment product aimed at a broad user base that can be freely transferred, it must validate early whether client identification and product circulation methods are compatible, and relevant costs should also be included in the business plan.

▌ 5. How On-Chain Securities Obtain Legal Validity

Switzerland's DLT reform, which came into effect in phases in 2021, made corresponding adjustments to securities registration, bankruptcy, and trading facilities. Articles 973d to 973i of the Debt Law establish a legal system for registered rights, commonly referred to as ledger-based securities. It allows eligible rights to be exercised and transferred through an agreed registration system.

Here, it is necessary to first determine what the token represents. For example, if a company wishes to place a certain type of debt on-chain, it must correlate the underlying debt, registration agreement, and records on the ledger. Investors should be able to understand the rights, obligations, and transfer rules they acquire. The technical system must also meet requirements for integrity, control, and information accessibility.

Companies often need to supplement handling methods for exceptional situations such as loss of access, system failures, erroneous transfers, and cancellations. The control method of client wallets will affect how rights are actually exercised; the legal arrangements in issuance documents will determine how responsibilities are allocated between issuers and holders. Both parts should be verified together during product testing.

When the platform further organizes multi-party transactions, it must also consider Article 73a of the Financial Market Infrastructure Act and subsequent provisions. The DLT trading facility system allows for the organization of multilateral transactions of DLT securities within the corresponding licensing scope and can be combined with specific custody, clearing, and settlement functions. The accompanying rules such as the Financial Market Infrastructure Ordinance will continue to refine requirements.

FINMA explains that relevant multilateral trading facilities that accept participants covered by Article 73c, paragraph 1(e) or provide centralized custody, clearing, and settlement functions under unified rules may trigger DLT trading facility licensing. The applicant must be established in Switzerland and undergo corresponding reviews. Issuing securities, providing wallets, and operating trading facilities are business segments that need to be separately organized.

▌ 6. What Happens to Client Assets When Custodians Encounter Issues

Clients entrust their assets to custodians, and one of their main concerns is whether they can retrieve their assets in the event of the custodian facing financial difficulties. Article 242a of the Swiss Debt Enforcement and Bankruptcy Act, along with Article 16(1bis) and Article 37d of the Banking Act, provides important legal grounds for the segregation and return of crypto assets.

Relevant judgments will focus on whether the assets are continuously held for the client and whether they can be clearly attributed to the client. When using collective custody, it is also necessary to determine each client's share in the collective assets. For businesses, this means that the backend ledgers, wallet arrangements, and client contracts must correspond so that the bankruptcy administrator can identify who has claims to which assets.

In January 2026, FINMA issued Custody Guidelines 01/2026, further clarifying custody requirements in banking, asset management, and other businesses. Particularly when entrusting custody to foreign institutions, it is necessary to assess the prudential regulatory situation of the counterpart and whether local laws can provide adequate bankruptcy protection. Swiss licensed institutions remain responsible after using third parties.

Such reviews will be reflected in some very detailed documents: which country's law applies to the sub-custody agreement, whether foreign institutions can re-delegate custody, whether assets can be used for other businesses, and who is responsible for making return requests in the event of bankruptcy. The technical ability to see wallet balances must be connected with the legal ability to smoothly retrieve assets through these arrangements.

The guidelines also set out exceptions for some existing asset management custody arrangements, involving comprehensive disclosure of increased risks, introducing suitable alternative custodians, and retaining written consent from clients. When businesses use such arrangements, they need to verify the applicable scope item by item and keep records in client files. Arrangements for different clients and products may need to be handled separately.

▌ VII. Legislative Direction and Business Application Preparation

Switzerland is also discussing further adjustments to the regulation of innovative financial businesses. The consultation scheme initiated by the Federal Council in October 2025 proposes new categories such as payment instrument institutions and crypto institutions, and discusses adjustments to the existing FinTech system and corresponding restrictions. This consultation will end in February 2026, and the specific system will be subject to the final approved text and effective arrangements.

Businesses can use these suggestions for medium-term planning while preparing launch plans according to currently effective rules. This way, what licenses are needed now and how they might migrate in the future will be clearer along two timelines. For projects planning to collect public funds or hold client assets, it is especially suitable to conduct regulatory communication before investing in development.

When submitting application materials, businesses can organize a set of corresponding documents around business, governance, funding, technology, and client protection. The business plan outlines revenue and service targets, organizational documents explain responsible parties and supervisory relationships, technical materials present operational permissions and security arrangements, and contracts clarify the services and rights actually obtained by clients.

Foreign sub-custody also needs to assess regulatory and bankruptcy protection; see Custody Guidelines 01/2026.

FINMA publicly states that the review cycle depends on the complexity of the project and the quality and completeness of the materials. Instead of estimating a fixed number of days to obtain a license, businesses are better off listing specific preparation items: when the local team will be in place, how to select partner banks and custodians, how to test the system, and who will rectify issues found.

For teams preparing to provide services from Switzerland to other markets, they also need to verify the marketing, service, and client access rules of the target market. By determining the first batch of clients, products, and service areas, it becomes easier to solidify the scope of licenses and operational plans. The regulatory map ultimately aims to help businesses answer these specific questions encountered when starting operations.

▌ VIII. How to Verify the Qualifications of a Partner Institution

When businesses look for partners in Switzerland, they can first verify the complete company name and then check FINMA's institutional directory or the member information of the corresponding self-regulatory organization. It is advisable to list the brand name, parent company, and the entity actually signing the contract separately. If one institution in the group obtains a license, the businesses of other affiliated companies still need to be verified one by one.

Next, check whether the activities covered by the license are consistent with the services to be procured. For example, if you need to custody assets, continue to clarify the actual custodian, sub-custody relationships, and asset return arrangements; if you need trade execution, confirm who receives the orders, where the transactions are executed, and how clearing and settlement are completed. This way, it becomes clearer which entities ultimately bear responsibility for a partnership.

You can also ask the partner to provide the latest contracts, client asset descriptions, audits, and related risk disclosure materials. Important information and key nodes in the business process should be preserved correspondingly, so that when updating services or changing partners, the team has a ready reference for further verification. For cross-border sub-custody or more complex stablecoin structures, specific legal opinions can be supplemented by local Swiss lawyers.

This article is intended for legal, policy, and industry research exchange, aiming to provide an objective analysis of digital finance, stablecoins, digital assets, and related regulatory dynamics. It does not constitute any form of investment advice, legal opinion, tax opinion, or other professional advice, nor does it constitute a recommendation, promotion, or solicitation of any financial products, digital assets, or business projects. The regulatory rules, market data, and institutional information mentioned in this article are mainly sourced from public materials and may be adjusted due to changes in laws and regulations, regulatory policies, market environments, and project progress. Readers are advised to independently judge based on the latest public information and comply with the applicable laws and regulations of their respective countries or regions. The author and the publishing platform do not bear any responsibility for any investment, trading, or other business decisions made based on reliance on the content of this article.