FINMA Crypto Banking Framework: How Switzerland Licences Digital Asset Banks

FINMA: The Regulator

The Swiss Financial Market Supervisory Authority (FINMA — Eidgenössische Finanzmarktaufsicht) is Switzerland’s integrated financial regulator, responsible for supervising banks, securities dealers, insurance companies, financial market infrastructures, and collective investment schemes. Established in 2009 through the merger of three predecessor authorities, FINMA operates as an independent institution under Swiss public law.

FINMA’s approach to digital assets — characterised by early engagement, principles-based analysis, and economic substance tests rather than definitional formalism — has made it the global benchmark regulatory authority for institutional crypto regulation. No other major financial regulator has produced the combination of clarity, consistency, and institutional engagement that FINMA has delivered across nearly a decade of digital asset oversight.

Phase 1: FINMA’s Initial Engagement (2013-2017)

FINMA’s engagement with blockchain technology began before the term “blockchain” was widely used. In 2013-2014, as Bitcoin attracted mainstream attention and the Ethereum Foundation was establishing in Zug, FINMA began internal analysis of how existing Swiss financial law applied to digital assets.

The key questions FINMA was addressing:

Is Bitcoin money? Swiss payment services law requires licensing for institutions processing payments. FINMA’s initial analysis concluded that Bitcoin transactions could, in certain circumstances, trigger payment services regulation — but that individual Bitcoin holdings and peer-to-peer transactions did not.

Are ICO tokens securities? Swiss securities law defines “securities” based on economic function — not on technical form or asset class. FINMA’s analysis established the principle that tokens needed to be analysed based on their actual economic rights and purposes, not based on their technical blockchain form.

Do Bitcoin businesses need banking licences? FINMA’s early guidance established that accepting public deposits — even in Bitcoin — could trigger banking licence requirements, depending on the scale and structure of the activity.

These early analyses were not publicly published as guidance but were communicated through private correspondence with specific companies and through engagement with the Crypto Valley Association and individual foundations. They established FINMA’s methodological approach: analyse the economic substance, apply existing regulatory categories where they fit, and engage with the industry to develop adapted frameworks where they don’t.

Phase 2: ICO Guidelines and Token Classification (2018)

FINMA’s most significant early public regulatory action was the February 2018 publication of ICO guidelines — a framework for analysing how Initial Coin Offerings (ICOs) interacted with Swiss financial regulation.

The guidelines established a three-category token classification system that became the global template for regulatory token analysis:

Payment Tokens

Payment tokens are tokens whose purpose is as a means of payment — for purchasing goods or services, or for value transfer. Bitcoin is the archetypal payment token. Under FINMA’s framework:

• Payment tokens are not securities
• Payment token exchanges and intermediaries may require anti-money laundering (AML) compliance under Swiss AML law
• Payment token custodians may require banking or payment service licences depending on scale

Utility Tokens

Utility tokens are tokens that provide access to a specific application or service — they function like a pre-paid voucher for a particular use. FINMA’s analysis:

• Utility tokens are not securities if they can be used immediately for their stated purpose
• If a utility token is issued before the service exists (i.e., the token is sold to fund development), it has an investment character that may bring it closer to an asset token
• Pure utility tokens that are functional at issuance do not require securities dealer licensing to issue

Asset Tokens

Asset tokens are tokens that represent claims on real-world assets (equity, debt, commodities) or that provide rights analogous to securities. FINMA’s analysis:

• Asset tokens are securities under Swiss law and require registration and prospectus compliance
• Exchanges dealing in asset tokens require securities dealer licences
• The issuance of asset tokens must comply with Swiss securities law

Hybrid Tokens

Many real-world tokens have characteristics of multiple categories — particularly utility/asset hybrids, where a token provides both access rights and investment exposure. FINMA’s approach: hybrid tokens are assessed under the most restrictive applicable category.

The 2018 ICO guidelines were remarkable for their speed (published while the ICO boom was at its height), their analytical rigour (based on economic substance rather than definitional formalism), and their practical guidance (specific examples and decision trees for common token structures). They established FINMA’s approach as the most technically sophisticated token classification framework in existence and have been referenced by regulators in Singapore, the UAE, Germany, and other jurisdictions developing their own frameworks.

Phase 3: The August 26, 2019 Licences

The simultaneous grant of banking and securities dealer licences to Sygnum Bank AG and SEBA Bank AG (now AMINA Bank AG) on August 26, 2019 was the most consequential single event in FINMA’s crypto regulatory history. Understanding what these licences mean requires understanding Swiss banking law.

What a FINMA Banking Licence Entails

A Swiss banking licence under the Banking Act (Bankengesetz) grants the holder the right to:

• Accept deposits from the public
• Operate as a bank under the Swiss banking name
• Access Swiss National Bank (SNB) liquidity facilities
• Have depositor protection coverage (up to CHF 100,000 per depositor under the Depositor Protection Act)

In exchange, licensed banks are subject to:

• Minimum capital requirements (ongoing, risk-weighted)
• Liquidity standards
• FINMA ongoing supervisory oversight
• Annual audits by FINMA-approved auditors
• Senior management fit and proper requirements
• Anti-money laundering (AML) compliance under Swiss AML law

What a Securities Dealer Licence Entails

A Swiss securities dealer licence under the Financial Market Infrastructure Act (FinMIA) and Financial Services Act (FinSA) grants the holder the right to:

• Trade securities on a professional basis for own account or client account
• Provide securities custody services
• Issue and distribute financial instruments

Critically for Sygnum and AMINA, the securities dealer licence covers digital asset custody, tokenised securities, and securities trading — the core of their business models.

Why the Co-Licensing Mattered

FINMA’s decision to license Sygnum and AMINA simultaneously — on the same day — was deliberate. A single licence would have been an experiment. Two simultaneous licences were a policy statement: Switzerland was creating a regulated digital asset banking sector, not permitting an individual company.

The co-licensing established the Swiss digital asset banking duopoly that has defined the institutional market for regulated crypto banking in Europe. For institutional clients requiring FINMA-licensed banking counterparties, there are exactly two Swiss options — a duopoly that FINMA has deliberately maintained by setting high licensing standards that subsequent applicants have not met.

Phase 4: The DLT Act (2021)

The Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology — known as the “Blockchain Act” or “DLT Act” — entered into force on February 1, 2021. The Act amended eight federal statutes to:

Create DLT Securities

The DLT Act created a new legal category: “DLT securities” (DLT-Effekten) — securities that exist on a distributed ledger rather than as traditional paper certificates or book entries. Under Swiss law, securities can now be created, transferred, and extinguished purely through blockchain transactions, without any paper certificate or central registry.

This is legally significant: it means that Sygnum and AMINA can issue, custody, and transfer equity, bonds, and funds on blockchain infrastructure within their regulatory framework — without the securities existing anywhere except on-chain. The tokenisation of real-world assets that both banks have built products around is built on this legal foundation.

Reform Settlement Infrastructure

The DLT Act reformed Swiss insolvency law to protect crypto asset holders in the event of a custodian’s bankruptcy. Under the new provisions, crypto assets held in custody are segregated from the custodian’s estate — meaning that if Sygnum or AMINA became insolvent, their client crypto assets would not be available to general creditors.

This segregation protection — now built into Swiss law — was a significant improvement over the pre-DLT Act position and is one of the strongest client protections for crypto custodial assets in any jurisdiction.

Create Crypto-Specific Trading Infrastructure Licensing

The DLT Act created a new licence category: the DLT trading facility — a regulated trading infrastructure specifically for DLT securities. Unlike a traditional stock exchange (which requires centralised settlement infrastructure) or an unregulated crypto exchange (which lacks the protections of financial market infrastructure law), the DLT trading facility licence enables regulated, blockchain-native securities trading with institutional-grade protections.

SDX — the SIX Digital Exchange, a subsidiary of SIX Group (the operator of the Swiss Stock Exchange) — holds the first DLT trading facility licence, enabling it to issue and trade DLT securities in a regulated environment.

Phase 5: FINMA’s Ongoing Supervision and Emerging Issues

FINMA’s engagement with digital assets continues to evolve:

DeFi

FINMA has engaged with the question of whether decentralised finance protocols trigger Swiss financial market regulation. The core challenge: traditional regulation targets identifiable legal entities. Decentralised protocols may have no such entity. FINMA’s analysis has focused on whether there are identifiable “effective decision-makers” behind ostensibly decentralised protocols — if so, those decision-makers may have regulatory obligations even if the protocol itself is autonomous.

Staking

FINMA has addressed the regulatory treatment of staking services — specifically, whether providing staking services for clients’ Proof-of-Stake assets constitutes a regulated activity. The analysis depends on whether assets are transferred to the service provider (which could trigger deposit-taking obligations) or merely delegated without transfer.

Stable Coins

FINMA has engaged with stablecoin issuers operating in Switzerland, applying its payment token and asset token framework to analyse whether stablecoins require banking, payment services, or securities regulation.

MiCA Interaction

As the EU’s Markets in Crypto-Assets (MiCA) regulation became effective in 2024, FINMA engaged with questions about Swiss companies’ access to EU markets under MiCA’s equivalence framework. Switzerland’s bilateral position outside the EU creates specific challenges for Swiss crypto companies serving EU clients — challenges FINMA is addressing through guidance and bilateral engagement.

Why Switzerland’s Framework Remains the Benchmark

Despite increasingly sophisticated regulatory frameworks in Singapore (MAS), the UAE (ADGM, VARA), and the UK (FCA), FINMA’s framework retains its benchmark status for three reasons:

Institutional depth: FINMA has a decade of institutional engagement with digital assets — longer than any other major regulator. Its staff understand the technology, the economics, and the institutional structures in ways that more recently engaged regulatory bodies do not.

Banking infrastructure: The existence of two FINMA-licensed digital asset banks — Sygnum and AMINA — provides a regulated banking interface that no other jurisdiction can match. Institutional clients can access Swiss regulated banking for their crypto activities; they cannot do so in Singapore, the UAE, or the UK at the same level of regulatory completeness.

Legal certainty: The combination of FINMA’s published guidelines, the DLT Act’s statutory framework, and a decade of regulatory engagement has produced a level of legal certainty in Switzerland that remains unmatched. For institutions that require predictable regulatory environments, Switzerland’s accumulated framework is the clearest.

Internal Links

• Sygnum Bank: The World’s First Regulated Digital Asset Bank
• AMINA Bank AG: From SEBA to Switzerland’s Second Digital Asset Bank
• The Swiss DLT Act: How Switzerland Legalised Tokenised Securities
• The Zug Foundation Model: How Swiss Stiftungs Power Blockchain Protocols
• Zug vs Singapore: Banking Comparison