📅 Field note from: March 2026 | Last updated: May 2026 Written shortly after FINMA published the consultation paper; updated with consultation progress observations in May 2026.
On October 22, 2025, the Swiss Federal Council released a draft amendment to the Financial Institutions Act — FinIA — and opened a public consultation. The document proposes two new license categories: the crypto-institution (Krypto-Institut) and the payment instrument institution (Zahlungsmittelinstitut). The consultation period closed on February 6, 2026.
I have been watching the Swiss crypto regulatory timeline since FINMA issued its first banking licenses to SEBA and Sygnum in 2019. That was a moment where Switzerland signaled it was serious about institutional crypto infrastructure. This proposal feels like the next structural layer: not just licensing a handful of elite firms, but building a taxonomy for the entire sector.
Here is what I have pieced together from reading the consultation document and the legal commentary around it.
The Problem the Proposal Is Trying to Solve
The current situation is messy in a way that is hard to see from the outside. If you look at Switzerland’s crypto landscape from a distance, it looks orderly: FINMA, the DLT Act, clear rules, respectable institutions. From closer in, the picture is more fragmented.
Crypto firms operating in Switzerland today can be in one of several regulatory buckets. Some hold banking licenses — like SEBA (now AMINA) and Sygnum. A much larger group operates under self-regulatory organization (SRO) supervision purely for AML/CFT compliance, with limited formal FINMA oversight over their core activities. A smaller number hold the fintech license introduced in 2019, which capped deposits at CHF 100 million and never quite fit what most crypto businesses actually do.
The result is that the industry has been running on a patchwork. FINMA has been issuing guidance — most recently the custody guidance from January 2026 — to fill gaps within that existing framework. But guidance has limits. You cannot patch a structural mismatch with circulars.
The FinIA amendment is the structural fix.
What the Crypto-Institution License Actually Covers
The crypto-institution license is designed for companies providing custody and trading of crypto-based assets with trading characteristics. In practice, that means:
- Custody of payment tokens such as Bitcoin and Ether
- Provision of staking services
- Client brokerage and trading services
- Short-term proprietary trading and exchange operations
- Custody of foreign stablecoins
What it explicitly does not cover: pure utility tokens, central bank digital currencies (CBDCs), and securities tokens. Those remain in separate regulatory territory.
The regulatory model is explicitly described as lighter than the framework applicable to securities firms. That framing matters. Switzerland already has securities dealer licenses for firms that want full capital markets access. The crypto-institution license is not that. It is calibrated for the specific risk profile of crypto custody and trading — which involves market risk, cybersecurity risk, and custody risk, but not the credit risk or leverage risk that comes with securities dealing.
On prohibited activities: crypto institutions cannot engage in uncovered proprietary trading and cannot lend client assets. This is a meaningful constraint that separates them from banks and securities dealers who can do both.
What the Payment Instrument Institution License Covers
The payment instrument institution is the second new category, and in some ways the more technically interesting one because it replaces the existing fintech license.
The current fintech license — introduced in 2019 alongside the broader DLT-focused regulatory package that eventually became the DLT Act — had a hard cap of CHF 100 million on deposits. That ceiling has been the binding constraint for fintech-scale payment businesses that wanted to grow without converting to a full banking license. The new payment instrument institution category removes that cap.
The specific rights granted under this license include:
Unlimited client fund acceptance — funds held on behalf of clients, without lending or paying interest. Client money must remain segregated from the firm’s own assets and protected in the event of insolvency.
Exclusive stablecoin issuance rights — this is the most notable new feature. Payment instrument institutions gain the exclusive right to issue CHF-pegged stablecoins that are fully backed by equivalent assets and redeemable at par on demand. The backing assets must meet quality standards, and firms must publish a whitepaper describing token terms, reserves, and associated risks.
One notable structural requirement: traditional banks cannot simply add stablecoin issuance to their existing license. To issue CHF-pegged stablecoins under this framework, a bank would need to establish a separate subsidiary that holds the payment instrument institution license. The activities cannot be combined with traditional banking functions.
How This Compares to the Existing License Landscape
Switzerland’s pre-reform crypto licensing structure had three main paths:
| License Type | What It Permitted | Key Constraint |
|---|---|---|
| Banking license | Deposits, custody, lending, securities | Very high capital requirements, full FINMA regime |
| Securities dealer license | Trading, brokerage, client execution | Strong capital and compliance requirements |
| Fintech license | Client funds up to CHF 100M, no lending | CHF 100M deposit cap — the ceiling that constrained growth |
| SRO membership | AML/CFT supervision only | No formal regulation of business activities, no direct FINMA oversight |
The new structure adds two purpose-built categories below the banking license tier, with direct FINMA supervision:
| New Category | Target Activities | Key Feature |
|---|---|---|
| Payment Instrument Institution | Payments, client funds, stablecoin issuance | Removes CHF 100M cap; stablecoin exclusivity |
| Crypto-Institution | Custody, trading, staking, exchange | Lighter than securities firm; no lending/credit |
For firms currently under SRO supervision, this is the significant shift. SRO oversight covers AML compliance, but it does not subject firms to FINMA’s ongoing supervision of their business conduct, governance, or capital adequacy. The crypto-institution license changes that. Once this framework is in force, custodians and exchanges that previously operated under SRO-only oversight will need to obtain a crypto-institution license and enter direct FINMA supervision — or stop operating.
How It Maps onto EU MiCA
Comparing Swiss crypto regulation to the EU’s Markets in Crypto-Assets Regulation (MiCA) is something I covered more systematically in the MiCA vs FINMA field note. The short version of how the FinIA amendment relates to MiCA:
The Federal Council’s consultation paper explicitly frames the reform as aligning with international standards — specifically the Financial Stability Board’s framework and MiCA. The stablecoin rules are the clearest example of that alignment: fully backed, segregated, redeemable at par, whitepaper disclosure. That is essentially the MiCA e-money token (EMT) model applied at a national level.
On the crypto service provider side, MiCA’s Crypto-Asset Service Provider (CASP) authorization is roughly analogous to the Swiss crypto-institution license — both create a regulated tier below full banking authorization, with custody and trading as the core permitted activities.
The differences are in the details. MiCA applies EU-wide passporting, which Swiss firms cannot access. The Swiss crypto-institution license is a domestic authorization only. A Swiss firm that wants to serve EU clients at scale still needs to either obtain a MiCA authorization in an EU member state or rely on reverse solicitation rules.
What the Swiss framework gains in return: it is not bound by MiCA’s one-size-fits-all design. The Federal Council can calibrate requirements to Swiss market conditions and risk profiles rather than harmonizing to the median EU case.
What the Timeline Actually Looks Like
The consultation closed February 6, 2026. The next steps follow Switzerland’s standard legislative process:
- The Federal Council reviews consultation responses and prepares a final draft
- Parliament debates and votes on the FinIA amendment
- Once passed, an implementation period allows existing firms to transition
The earliest realistic entry into force is late 2027. For firms currently under SRO supervision, the transition rules matter: the proposal suggests that firms affiliated with a recognized SRO can continue operating during the transition period while they apply for the appropriate new license.
That transition window is not unlimited. The practical planning horizon for affected firms is now.
What Changes in Practice — and What Does Not
After reading the consultation paper and the commentary around it, a few things stand out as practically significant:
For SRO-supervised exchanges and custodians: The shift to direct FINMA oversight is real. Governance formalization, compliance functions, external audits, annual reporting — these requirements exist at banks already, but they are new costs for firms that have operated under lighter SRO supervision. Smaller operators may find the compliance burden prohibitive.
For payment-focused fintech firms: The removal of the CHF 100 million cap is genuinely useful. Firms that have been constrained by that ceiling can now plan for growth without needing to convert to a full banking license.
For stablecoin issuers: The CHF stablecoin exclusivity granted to payment instrument institutions creates a clear legal path. Currently, CHF-pegged stablecoins exist in a grey area. This would define what a legally sound CHF stablecoin looks like and who can issue it.
For banks: The requirement that banks spin off a separate subsidiary to participate in stablecoin issuance is worth noting. It is not a prohibition — it is a structural constraint that reflects the policy view that banks should not mix traditional deposit functions with stablecoin issuance.
What does not change immediately: the underlying regulatory philosophy. Switzerland is still calibrating — not prohibiting. The direction continues to be toward formalization of a sector that exists, rather than attempts to suppress or redirect it.
A Word on Capital Requirements
One noticeable gap in the consultation paper, at least in the version that has been publicly discussed: specific numerical capital requirements for the crypto-institution license have not been disclosed. The proposal references “adequate capital” and “progressive capital requirements” for significant payment instrument institutions, but no CHF thresholds have been specified in the commentary I have seen.
This will matter significantly once the legislation moves toward parliamentary drafting. The capital level is what determines whether the crypto-institution license is genuinely accessible to mid-sized Swiss crypto firms, or whether it becomes another regime that only well-capitalized players can realistically obtain. The outcome of that calibration is still open.
What I Am Watching
The consultation process closed in February 2026. The Federal Council is now reviewing responses. From here in Zug, the conversations I have been having with people in the sector — not attribution, just impressions — suggest that the industry broadly supports the direction while worrying about the pace and cost of transition.
The SRO-supervised firms are the ones with the most at stake. They know direct FINMA oversight is coming. The question is how much runway the transition rules give them and what the capital requirements ultimately look like.
The stablecoin provisions are also drawing quiet interest from several fintech players who have been waiting for legal clarity before building CHF-pegged products. The moment the law is finalized, that segment could move fast.
I will update this note as the legislative process advances.
Related field notes:
- When FINMA Gave Crypto Its First Banking Licenses: A 2019 Field Report — the origin point of Switzerland’s crypto licensing story
- The DLT Act Explained Without a Law Degree — the legislative infrastructure this builds on
- FINMA’s Crypto Guidance 01/2026: What It Actually Means for Custody — the parallel custody rulemaking from the same regulatory moment
Sources consulted for this field note are listed above. This is an observer’s reading of publicly available consultation materials, not legal advice.