Swiss Financial Market Supervisory Authority: Stablecoin Issuers Pose Risks to Banks Offering Default Guarantees
Stable-coin issuers operating in Switzerland pose a risk to the banks they work with, the Swiss Financial Market Supervisory Authority (FINMA) said in guidance issued on Friday, 26 July.
That's because these issuers take deposits from the public and would be considered banks, but avoid the requirement of needing a banking licence by entering into agreements with registered lenders to reimburse clients in the event of default.
This poses a risk to holders of stablecoins and to banks that provide guarantees against default," FINMA said in its guidance. In the event of a breach by a stablecoin issuer, the bank providing the default guarantee may suffer reputational damage and may be exposed to legal risk as a result of its contractual relationship with the issuer."
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