During its meeting on 16 October 2019, the Swiss Federal Council was informed about the current opportunities and challenges associated with stablecoins.
Switzerland will continue to actively monitor discussions on new digital technologies such as blockchain/DLT, etc. The country is generally open to innovative approaches in the financial market.
On 18 June 2019, Facebook announced the creation of the new Libra cryptocurrency, which is to be overseen by the Geneva-based Libra Association. As a stablecoin backed by a basket of currencies, Libra’s volatility should be limited.
The supervisory authority FINMA announced on 11 September 2019 that, based on the information available, the project would be classified as a payment system and a corresponding licence would be required. Consequently, it would automatically be subject to the Anti-Money Laundering Act and international standards in this area.
The Federal Council is keeping a very close eye on global stablecoin projects and their associated opportunities and risks. There are reservations in the areas of financial stability, the fight against money laundering and terrorist financing, monetary and currency policy, and data protection. The Federal Council is committed to ensuring that the currency and stability policy challenges, in particular, are addressed through international cooperation between governments, central banks and supervisory authorities, with private providers also included.
Switzerland is open to discussions on internationally viable standards in connection with the use of new technologies. The upcoming annual meetings of the Bretton Woods institutions and the meeting of G20 finance ministers and central bank governors provide an ideal platform for these discussions.
