Swiss Financial Market Supervisory Authority Introduces Strict Requirements For Payment Transactions On Blockchain

On 26 August 2019, the Swiss Financial Market Supervisory Authority FINMA published the FINMA Guidance 02/2019 regarding payments on the blockchain (the "Guidance").1 This Guidance informs market participants on FINMA's interpretation of Swiss anti-money laundering ("AML") regulation in the context of blockchain payment services, in particular with regard to the requirements for financial service providers under FINMA supervision to transfer payment originator and beneficiary information to the recipient institutions. The practice adopted by FINMA is rather restrictive and goes beyond the standards established by the Financial Action Task Force FATF in this regard. For the time being, this practice will substantially limit affected Swiss market participants in offering payment transactions in digital tokens. While the Guidance applies to service providers subject to FINMA supervision only, such as banks, it can be expected that recognised Swiss AML self-regulatory