Blockchain-Backed Assets: A New Frontier for Trading

The world of finance is undergoing a significant shift with the emergence of blockchain-backed assets as tradable securities. Gone are the days when only traditional assets like stocks and bonds were considered investible. Today, innovative companies are issuing tokens representing ownership in novel assets such as real estate, art paintings, and even cryptocurrencies.

FINMA Classification

According to FINMA, asset tokens are classified as claims to ownership of an asset, making them securities similar to shares from a regulatory perspective. This means that companies must adhere to strict guidelines when issuing these tokens.

Stablecoins: A New Form of Cryptocurrency

Stablecoins, a type of cryptocurrency pegged to the value of another asset or currency, have gained popularity in recent years. However, their classification and regulation are complex and multifaceted. FINMA has outlined a framework for stablecoin issuers, which includes requirements for anti-money laundering (AML) compliance and licensing.

AML Regulations

The Swiss AML Act imposes obligations on financial intermediaries and dealers to prevent money laundering and terrorist financing. Compliance with these regulations requires the identification of beneficial owners and membership in a self-regulatory organization or direct supervision by FINMA.

Payment Services

Switzerland has no specific payment services directive, unlike the European Union. Payment activities are regulated either lightly under AML laws or strictly under banking regulations. The fintech license has created a middle ground for companies operating in this space.

DAOs: Decentralized Autonomous Organizations

Decentralized autonomous organizations (DAOs) operate on blockchain technology and are designed to be autonomous, with decision-making governed by voting mechanisms and smart contracts. While not recognized as a defined term in Swiss law, DAOs may qualify as collective investment schemes or simple partnerships under certain circumstances.

Implications of New EU Law

The European Union’s new regulatory framework for cryptocurrencies has significant implications for the industry. Companies operating in this space must ensure compliance with these regulations to avoid legal consequences. The shift towards stricter regulation is expected to bring greater transparency and security to the market.

Conclusion

As the blockchain-backed asset landscape continues to evolve, it is essential for companies and investors alike to stay informed about regulatory requirements and changes. With FINMA’s guidelines providing a framework for classification and regulation, the industry is poised for growth and innovation.