Swiss Financial Market Supervisory Authority, FINMA, has recognized the innovative potential of blockchain technology and has thrown its support to a federal Blockchain/ICO Working Group that is developing initiatives to establish blockchain technology sustainably and successfully.
FINMA recognizes that blockchain technology’s potential extends beyond the financial markets. It is the goal of the organization to take a balanced approach to regulate and supervise ICO projects to foster legitimate innovators to launch their projects that are consistent with Swiss laws to protect the interests of investors and the integrity of their financial system.
It’s not in the interest of the regulator to see the development of an unmanageable cryptocurrency bubble. If it bursts it may lead to severe consequences for their financial market. The contagion effect may lead to similar collapses in other global financial markets.
Sometimes the after effects of a market collapse leads to the creation of the foundation of a new economy. The burst of the dot-com bubble is an example of this. The ensuing technological innovation and human capital development has led to the creation of the current Internet-based economy of information exchange, social interactions, ecommerce and more.
Switzerland has been a hotbed for ICOs and its blockchain developers are building the foundation for the next economic revolution. Although all crypto-tokens are built on a blockchain or shared cryptographic ledger, FINMA has decided to differentiate them in three key categories:
1. Payment Tokens
Bitcoin and other cryptocurrencies designed for methods.
2. Asset Tokens
Blockchain based versions of traditional financial assets like stocks and bonds.
3. Utility Tokens
Crypto tokens designed to provide digital access to an application or service.
Although there is no ICO specific regulation, FINMA may intervene on a case-by-case basis and take needed action with current legislation. Current concerns include money laundering by criminal and terrorist organizations and schemes to cheat investors of their wealth.
It is expected that many countries around the world would be paying closer attention to evolving guidelines and legislation from organizations like FINMA to develop their own. Please refer to the reference below for additional details.
Reference: FINMA publishes ICO guidelines
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