Switzerland’s FINMA Publishes Guidance on Stablecoins to Address Risks on Default Guarantees Issued by Banks

FINMA’s guidance, which builds on an initial note from 2019, sets out a number of requirements to ensure adequate protection. Customers must have their own claim against the guarantee-providing bank, and the guarantee must cover the full amount of deposits and interest. In addition, the bank must ensure that the deposits it receives don’t surpass the cover provided by the guarantee.