250 people attended a 90 minutes speech of the Director of Swiss FINMA (Financial Market regulator Switzerland) Mark Branson this week in Zurich. The attention was so big, so that two extra rooms with Life Video transmission had to be organized.
What is happening in Switzerland´s Crypto World? What are the regulators thinking? This is what is the interest of many Lawyers and people in the banking industry as well as governments.
The negativity has made space to the opportunity
Realizing that in the last decades the only big innovation in the banking and finance industry was the ATM it is clear that something more is to come say the Director of FINMA referring to the not very innovative
Without speaking out if Bitcoin and the other cryptocurrencies are a good invention and with some reference to the Tulip mania back in history Branson acknowledges that this time something is different. The volatility and price increases top the ones of the tulip mania and also shows to have the potential to revolutionize not only the finance industry.
No Disruption yet
The from many people predicted financial and system disruption has not happened yet as the market took a break and is still too small to affect the industry in its fundaments. Nevertheless is Switzerland looking ahead and is taking the lead together with Singapore to open its door to innovation of the Crypto and Blockchain Technology.
Taking the innovation as an opportunity Switzerland invites new projects and ICO´s with its predictable approach on regulation and will continue to do so. The advantage of Switzerland is that FINMA is the only regulator and with its communication of predictable and analogue law entrepreneurs who are starting a new project have security that law will not change overnight like we are still seeing it in other countries.
Aim of FINMA
The aim of FINMA was clear communicated by Mark Branson. First to take away all possible hurdles for innovation and at the same time make sure that AML (Anti Money Laundering Law) and KYC (Know Your Customer) is applied in the same way as in the banking and shareholder industry. This way until there are new laws, where necessary, are created that likewise laws apply for ICO’s. This means a pay token needs to comply with the laws of currencies, a utility token with the law of Shares and an Asset token with money raising and capital funding laws.
Also on top of the priority list is the protection of investors. For this reason FINMA has created a guideline for ICO`s with the goal to help the real projects and not to give space for Scams and untrustworthy projects. Another important aim is to protect companies, ICO’s and Investors from Cyberattacks. This is a challenge FINMA is taking on with the government as this is not only for protection in the financial world but for the country as its own. Here the guidelines of FINMA for ICO´s
IPO versus ICO
FINMA acknowledges that raising money in the traditional way is very challenging, inefficient and expensive therefore ICO´s are seen as a necessary revolution and innovation against the IPO´s.
Money laundering with Crypto currencies
Mark Branson answered the question about money laundering with Cryptocurrencies with the following words; there is about 2-5% of transaction in Cryptocurrencies that is used for money laundering. The same %, 2-5% of transaction in FIAT money is also used for money laundering. In reality the problem because of much more volume is greater in FIAT currency at the moment.
The language has changed completely in Switzerland and now the Blockchain and Cryptocurrency industry is seen as an opportunity for both Switzerland and the world. The main goal is to make sure that project launched out of Switzerland are compliant with the laws and serious start-ups to protect investors as much as possible. This way Switzerland is attracting both investors and developers and position itself at the forefront of this new and powerful industry. There is a long way to go as the industry is only getting started and we will have stay updated for news, changes and innovation.