Swiss Financial Market Supervisory Authority: Stablecoin issuers pose risks to banks providing default guarantees

BlockBeats news, July 26, the Swiss Financial Market Supervisory Authority (FINMA) said in guidance issued on Friday that stablecoin issuers operating in Switzerland pose risks to the banks that work with them.

This is because these issuers absorb deposits from the public and should be regarded as banks, but avoid the need for a banking license by reaching an agreement with a registered lender to repay customers in the event of default.

FINMA said in the guidance: "This poses risks to stablecoin holders and banks that provide default guarantees. If a stablecoin issuer violates regulations, the bank that provides the default guarantee may suffer reputational damage due to its contractual relationship with the issuer and may face legal risks." (CoinDesk)