The Digital Regulator, October 2019 (written for SEBA Bank AG)
During the first part of the year, 2019 was expected to be the STO (Security Token Offering) year. However, It has turned out to be a stable coin year. The announcement of Libra has been the key event. It has brought crypto terminology to the main street and constituted a wake-up call for governments and regulators globally. It has shown that the crypto industry can become systemically relevant to the monetary and financial system. Libra has paved the way for a plethora of smaller-size projects, particularly in Switzerland – home to the most developed crypto finance ecosystem – and caused FINMA to announce its position on Libra by means of a guidance for such smaller-size projects. FINMA’s guidance states that a project that would need a payment system license incremented by prudential regulatory requirements as well as international regulatory coordination. With this move, Switzerland further cements its position as the most developed, yet rigorous and pragmatic, crypto finance hub It recognizes the need to address global and coordinated fashion the systemic risk aspect associated with large-scale stable coin initiatives – while the G7 handed off work on regulatory issues raised by global stable coins to the Financial Stability Board (FSB).