In its response to the planned amendments to the Financial Institutions Act, the Swiss Bankers Association (SBA) supports the objective of strengthening Switzerland’s international competitiveness in stablecoins.
It says this requires a globally competitive legal framework.
Such a framework should protect monetary sovereignty, enable innovation, and enhance Switzerland’s attractiveness as a location for stablecoin issuance. It must not undermine financial stability, integrity, or customer protection.
The proposed amendments would create a clear legal basis for issuing certain stablecoins.
These are crypto-based payment instruments with a stable value, pegged to a currency and redeemable at nominal value. The SBA supports the draft in principle but raises several concerns.
The association says regulators should integrate new technologies into the existing financial system. Regulation should remain coherent and technology-neutral.
It should also allow traditional institutions to innovate. This includes permitting banks to issue tokenised deposits and stablecoins.
Banks already meet the most extensive supervisory requirements. The SBA therefore sees no reason to prevent them from issuing stablecoins under a banking licence. It notes that the EU’s MiCAR framework does not impose such restrictions.
By contrast, the draft limits issuance to payment instrument institutions. The SBA warns that this Switzerland-specific approach could weaken the country’s appeal and put domestic banks at a competitive disadvantage.
Natalie Graf, Senior Legal Counsel at the SBA, said:
“With its ambition to position Switzerland as a leading hub for innovation in digital finance, the SBA favours a modern, internationally compatible regulatory framework that is conducive to stability.”
The SBA also calls for stronger customer protection. It says payment instrument institutions should not place client funds with other such institutions.
From a financial stability perspective, only banks should hold sight deposits with the Swiss National Bank, and only under strict conditions.
It therefore urges authorities to carry out a comprehensive impact assessment covering all stablecoin use cases.
Featured image credit: Edited by Fintech News Switzerland, based on image by Dang Pham, Dang Pham and rawpixel.com
