Selected Publications

Switzerland boosts DLT/blockchain framework conditions (Dec 2019)

Foreword: METI Advisory wrote this report for SEBA Bank AG. Abstract: On 27 November 2019 the Swiss Federal Council adopted the dispatch on the framework conditions for DLT/blockchain that aims to increase legal certainty, remove barriers to entry for applications based on DLT/blockchain and reduce the risk of abuse. This step provides Switzerland with a very advanced, fundamental and comprehensive legal framework, achieved by adapting existing laws instead of introducing a specific technology-related law. The dispatch proposes specific amendments to nine federal acts, covering civil securities, insolvency and financial market laws. The Swiss Parliament is expected to examine the proposal for the first time in early 2020. Other noteworthy regulatory developments include the Basel Committee on Banking Supervision (BCBS) anticipating work on the prudential treatment of crypto assets (of obvious relevance to emerging crypto banks and banks dealing with crypto assets), the likelihood that in Germany, banks will be given authorisation to offer the sale and storage of cryptocurrencies (poised to boost cryptofinance in Germany), growing crypto legal certainty in England (demonstrating the regulatory commitment to crypto) and the prospect that in Singapore, cryptocurrency-based derivatives will be listed on the regulated exchange (which would further consolidate the country’s position as a prime cryptofinance hub).


International regulators tackle the issues of stable coins and digital money (Nov 2019)

Foreword: METI Advisory wrote this report for SEBA Bank AG. Abstract: Libra was a wake-up call for international regulators last summer. They realized that cryptocurrencies could rapidly become systemically relevant if they were to substitute national currencies to some extent. Analyses by the G7, Financial Stability Board (FSB) and the Bank for International Settlements (BIS) led to the introduction last October of a new category of token, the GSC, and to the formulation of strict authorization requirements. As a consequence, no such coin will be issued in the short term. The official sector has also been quite clear about the ineluctability of CBDCs and has initiated work to integrate CBDCs into a Distributed Ledger Technology (DLT) infrastructure. Reportedly, China has positioned itself as a potential first CBDC mover. Depending on who starts the innovation process and on the degree of international influence of its currency, the current international monetary system based on the USD as a global payment currency could be challenged. Irrespective of conjectures, the intense regulatory focus has enhanced trust in digital and crypto finance. The last few weeks has been rich of other noteworthy developments. Confirmation has been given in the US that the Bitcoin (BTC) and Ether (ETH) are not securities – and therefore fall outside the remit of securities law; that Liechtenstein has written history by becoming the first state to provide a comprehensive set of rules for a digital asset ecosystem; that China has unveiled plans to become a leading blockchain jurisdiction, and that Japan and Hong Kong have introduced guidelines for crypto fund managers.


FiCAS AG: Adding alpha potential to your cryptoasset investment (November 2019)

FICAS AG (www.ficas.com) is a new kid in the cryptovalley town. It offers actively managed cryptocurrencies investment products to qualifying investors based on a clear investment strategy that allowed its founder, Ali Mizani, to consistently generate material alpha over the past handful of years in the context of private portfolios management. FiCAS allows investors to benefit from (active) risk management, lower the dependency on market price development, and unlock alpha potential. From an industry perspective. FiCAS brings the integration of cryptofinance and traditional finance a step further, broadens the cryptoinvestment offering in a complementary way and demonstrates once again the fertility of crypto valley.


Switzerland tackles stable coins (Oct 2019)

Foreword: METI Advisory wrote this report for SEBA Bank AG. Abstract: 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).


Cryptonation (September 2019)

Honored to have contributed to the book "Cryptonation" and to have shared this privilege with 90 others distinguished shapers of Cryptonation Switzerland.


Past, Present & Future of Cryptofinance in 700 words (September 2019)


A Week to Remember (August 2019)

Eventful week, the week 24-31 August 2019, in Cryptovalley and beyond. First, after months of visionary, creative, hard and disciplined work, two Swiss regulated universal cryptobanks (banking and securities dealers licenses) were born - SEBA and Sygnum. A unique experience - navigating uncharted waters - for those (like me) who have been directly involved. The delivery is a game changer for the crypto and the broader financial ecosystem. Second, FINMA issued Swiss-finished crypto AML rules: Rules that are more stringent than the international FATF standard. Departing from an international standard is particularly bad if the direction is ‘less’ (worst case: not applied). ‘More’ may be good for the ecosystem in the longer term if the quantum is administered thoughtfully. Bank's capital rules teach. But embedded in the FATF standard is the complex VASP travel rule, the implementation of which (as highlighted in an event organized by Crypto Valley Association) requires detailed conceptual clarity and a crypto SWIFT. The race to provide it is open. Third, the visit by US House representatives to Swiss authorities re Libra did not temper the(ir) concerns. No surprise. The concerns raised by a stable coin à la Libra are geopolitically monetary in nature and can only be tempered at the G7-G20 level.


Releasing the Digital SRO project for independent implementation (August 2019)

The Crypto Valley Association under the lead of Mattia Rattaggi has developed a project and an implementation plan for a FINMA-licensed SRO dedicated to the needs of the digital/crypto finance. The project has now been released for implementation as an independent and commercially self-sustainable association within the Cryptovalley ecosystem. Such market infrastructure, once successfully implemented, will help the growing digital and crypto asset service industry transitioning to the next level of maturity.


Facebook's Libra: A quick assessment (22 June 2019)

Libra is a fintech innovation seriously challenging banking, leveraging real problems of financial inclusion and anachronistic banking, the network of FB and associated partners, and blockchain technology. It is contributing to mass crypto adoption. It doesn’t piggyback on traditional card system, but is debit card in nature - little to do with bitcoin and (its) decentralized blockchain(s). It is a centralised enterprise, potentially a gigantic systemically relevant fund manager (100% backup), supporting government debt, and with an option to operate fractional reserve. Even if Libra technically managed to reconcile highest blockchain consensus security with full decentralization and VISA-like performance, it wouldn’t really have interest in moving beyond the 100 nodes, as this would dilute RoE. Libra’s regulatory ride will be tortuous and long. Regulators emphasize “mass regulation before mass adoption”. Anticipating systemic importance, they will hold it against the highest prudential standards. The importance of central governance and FB data privacy track record add to the concerns. Yet, taking the history of tech change and economic growth as guide, regulators should keep an open mind.


Towards Global Crypto AML Standards (March 2019)

Material developments in crypto regulation! Global AML standards are about to be finalised by the FATF. Regulators and the industry need to walk the last mile (and beyond) together to ensure best outcome. In this short article I recap what happened, clarify why it matters and offer an assessment.


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