Long characterised by a wide disparity in national approaches, the crypto-asset sector is now undergoing a phase of accelerated standardisation. The European Union has paved the way with the Markets in Crypto-Assets regulation (MiCA), which has been directly applicable in all Member States since 2024. It provides a harmonised framework as well as a valuable passport to a market of 450 million consumers. In the United States, the GENIUS Act, ratified in 2025 and currently being implemented, established the first federal framework applicable to stablecoins.
With its Crypto Valley, Switzerland could not remain on the sidelines of this regulatory movement without risking the marginalisation of its financial centre. It faces a dual challenge: maintaining its competitiveness and appeal whilst ensuring investor protection and the stability of the financial system.
To address this challenge, the Federal Council has put forward a draft amendment to the Financial Services Act (LEFin) for consultation, introducing two new categories of authorisation.
The first, that of a payment instrument institution, is aimed in particular at issuers of a certain type of stablecoin. Designed as an evolution of the Fintech banking licence – which has remained little used – this new authorisation is based on a lighter prudential regime, primarily focused on client protection.
The second, that of a crypto-institutions, covers a wide range of activities, including the custody of crypto-assets, trading crypto-assets on behalf of third parties, and market-making activities involving crypto-assets.
One of the notable advances of the draft is the new framework for the issuance of ‘stable crypto-based payment instruments’. These are defined as crypto-assets issued in Switzerland, which are pegged to the value of a state-issued currency, designed to maintain a stable value through the holding of underlying assets, accompanied by a legal obligation on the issuer to redeem them at their nominal value.
Only payment instrument institutions will be able to issue such Swiss stablecoins, up to the value of the client funds accepted. They will also be permitted to provide custody services and payment services. The acceptance of client assets, an activity that is banking in nature, is therefore allowed under a new type of authorisation, distinct from the banking licence.
In return, the draft provides for enhanced protection mechanisms. Client assets must be strictly segregated from the institution’s own assets and held in accordance with specific conditions, either as sight deposits or through investments in high-quality liquid assets with a short remaining maturity, denominated in the currency of the stablecoin issued. Their value must at all times correspond to the clients’ assets. Clients will not be entitled to interest, but the institution will be free to retain the income generated by their investment.
In the event of bankruptcy, client assets will be subject to full segregation and will be liquidated separately for the benefit of clients and stablecoin holders, unlike the regime applicable to ordinary bank deposits.
Payment institutions will not be permitted to issue multi-currency stablecoins or algorithmic stablecoins. Stablecoins issued abroad, even if subject to equivalent requirements, will not be recognised as ‘stable crypto-based payment instruments’’ but will be classified as trading crypto-assets subject to a different regime. Furthermore, payment instrument institutions will not be permitted to redeem or exchange stablecoins issued by other issuers.
The draft provides that capital and own funds requirements will depend on the size of the institution. The CHF 100 million cap on client assets provided for under the current Fintech licence will be abolished.
One key point remains controversial. Unlike the regimes in force in the European Union and the United States, banks will not be eligible for the payment instrument institution status. The Federal Council justifies this exclusion by pointing to the incompatibility between the proposed segregation rules – which require separate off-balance-sheet assets – and the legal treatment of traditional bank deposits, which are recorded on the balance sheet as liabilities to clients. In other words, banks will not be able to operate as payment instrument institutions without establishing a dedicated legal structure, a feature of the draft that has been widely criticised. The Swiss Bankers Association considers that such a solution is not justified from a prudential perspective and that it creates a competitive disadvantage for banks.
Overall, the Federal Council’s proposal sets out a convincing regulatory framework, seeking to balance client protection with the needs of a rapidly growing industry. Whilst the exclusion of banks from the system warrants discussion, another challenge for the Swiss financial centre – acknowledged by the Federal Council – is FINMA’s ability to process auhorisation applications swiftly. The success of the new regime will therefore largely depend on its practical implementation in terms of costs, predictability and the time taken to grant licences.
On 8 April 2026, six Swiss banks (UBS, PostFinance, Sygnum, Raiffeisen, BKZ and BCV) and Swiss Stablecoin AG announced that they had joined forces to launch a sandbox to test the potential uses of a CHF-denominated stablecoin in Switzerland. This pilot project, initiated within a traditional banking environment, reflects the growing interest of banks in integrating digital currencies into their payment systems.
Frédérique Bensahel
Partner & Head of the Banking and Finance group, Geneva
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