Stablecoins

The Federal Council is closely monitoring developments in the area of stablecoins. International cooperation is essential in view of the global nature of some stablecoin projects. Switzerland is actively involved in the relevant work in the competent bodies, especially the Financial Stability Board.

Stablecoins are cryptocurrencies whose value is intended to be stabilised by underlying assets (e.g. fiat currencies or commodities). They aim to limit the high volatility of cryptocurrencies such as Bitcoin, which makes them more suitable for payments. For this reason, the demand for stablecoins is growing strongly worldwide.

The Swiss financial centre is attractive for innovative business models, including stablecoin projects with an international focus. Switzerland recognises the opportunities of such projects for a more efficient international payment system, but it also takes the risks seriously. It attaches great importance to clear regulatory requirements and good international cooperation.

Switzerland is committed to ensuring that the challenges posed by stablecoins in terms of financial stability and anti-money laundering are addressed by means of international cooperation. In October 2020, the Financial Stability Board (FSB) published recommendations on the regulation, supervision and oversight of global stablecoins. Switzerland continues to participate actively in this work.

FSB recommendations

Libra/Diem project

In Switzerland, the Swiss Financial Market Supervisory Authority (FINMA) is responsible for the authorisation procedure. A stablecoin project has to meet stringent stability and anti-money laundering requirements in order receive a licence.

In April 2020, the Libra Association applied to FINMA for a payment system licence in Switzerland.

Following the redimensioning of the project, in particular the restriction to US dollars and the focus on activities in the USA, the Diem Association (the former Libra Association) suspended the licence application in May 2021.