Swiss Payment & Crypto Institution Licenses
The Federal Council’s October 2025 legislative proposal represents the most significant structural change to Swiss crypto regulation since the DLT Act of 2021. The proposal introduces two new FINMA license categories — payment institutions and crypto institutions — designed to replace the existing fintech license and create dedicated regulatory pathways for stablecoin issuers, wallet providers, crypto trading platforms, and market makers. Expected to take effect around 2027, these new categories will reshape the licensing landscape for Crypto Valley’s 1,749 blockchain companies.
Payment Institution License
The proposed payment institution license replaces the existing fintech license (FinTech-Bewilligung) introduced in 2019. The current fintech license allows entities to accept public deposits up to CHF 100 million, provided these deposits are not invested and no interest is paid. The new payment institution license removes the CHF 100 million cap on client deposits, significantly expanding the operational scope for payment-focused crypto companies.
Critically, the payment institution license confers an exclusive right: only licensed payment institutions (and banks) will be permitted to issue Regulated Stablecoins. Under the proposal, a “Regulated Stablecoin” is defined as a crypto asset pegged to one or more fiat currencies, issued by a licensed entity, with full reserve backing and customer claims against the issuer. This means that stablecoin issuers currently operating under other regulatory arrangements — banking licenses, existing fintech licenses, or SRO membership — will need to obtain or convert to the payment institution license for continued stablecoin issuance.
The implications for Swiss stablecoin projects are direct. Sygnum Bank’s DCHF stablecoin, backed by SNB sight deposits, currently operates under Sygnum’s banking license — which satisfies the new requirements. AllUnity’s CHFAU, the first MiCAR-compliant CHF stablecoin, will need to assess whether its current regulatory arrangement satisfies the new payment institution requirements or whether a license conversion is necessary. The defunct CryptoFranc (XCHF) by Bitcoin Suisse operated under a different framework that would not have survived the transition. Frankencoin (ZCHF), as a decentralized stablecoin without a centralized issuer, presents a classification challenge under the new framework.
Crypto Institution License
The proposed crypto institution license is modeled on the existing securities firm license but tailored for crypto-specific activities. Licensed crypto institutions may act as wallet service providers (custodying crypto assets for clients), trade crypto assets for clients (exchange services), and act as market makers in crypto asset markets.
This license provides a dedicated regulatory home for companies that currently operate under securities firm licenses, SRO membership, or other regulatory arrangements. The crypto institution license would carry capital requirements, organizational requirements, and conduct rules calibrated for crypto operations — acknowledging that the operational risk profile of a crypto custodian differs from a traditional securities dealer while requiring equivalent investor protection standards.
For Crypto Valley companies, the crypto institution license clarifies a long-standing ambiguity: what license does a crypto exchange or custodian actually need? Currently, different crypto companies hold different license types (banking license, securities firm license, fintech license, SRO membership only) for similar activities, creating regulatory inconsistency. The dedicated crypto institution license would standardize the regulatory treatment of core crypto activities.
Investment Classification Changes
The proposal includes a potentially far-reaching reclassification: payment tokens used primarily for investment purposes — specifically Bitcoin and Ether — may be classified as financial instruments under the Financial Services Act (FinSA). Currently, Bitcoin and Ether are classified as payment tokens subject to AML/KYC obligations but not securities regulation. Reclassification as financial instruments would require intermediaries offering these tokens to comply with FinSA conduct rules, including suitability assessments (ensuring the investment is appropriate for the client’s risk profile), information obligations (providing clients with key information documents), and best execution duties.
This reclassification would affect every crypto exchange, broker, and asset manager operating in Switzerland. Sygnum Bank and AMINA Bank already apply FinSA-equivalent conduct standards to their crypto services as banking licensees. But smaller intermediaries — SRO-supervised crypto exchanges, fintech license holders — would face significant new compliance obligations.
Timeline and Transition
The Federal Council initiated the consultation process in October 2025. Parliamentary debate is expected in 2026, with royal implementation through revised ordinances. The new license categories are projected to take effect around 2027, with transition periods for existing licensees to convert to the appropriate new category.
Companies currently holding fintech licenses will transition to payment institution licenses if they issue stablecoins or accept deposits, or to crypto institution licenses if they provide custody, trading, or market-making services. Companies holding SRO membership only may need to apply for a crypto institution license if their activities fall within the new license perimeter.
Supervision Transfer from SROs to FINMA
One of the proposal’s most consequential structural changes is the transfer of supervision for payment institutions and crypto institutions from Self-Regulatory Organizations (SROs) to direct FINMA oversight. Currently, crypto companies that qualify as financial intermediaries but do not hold a FINMA banking or securities firm license must join a recognized SRO for AML supervision. Under the proposed framework, both payment institutions and crypto institutions would be supervised directly by FINMA, eliminating the SRO intermediary layer for these entities.
This supervision transfer carries significant implications for Crypto Valley companies. Direct FINMA supervision is more intensive and costly than SRO membership. FINMA applies its own audit standards, conducts on-site examinations, and has direct enforcement authority including license suspension and revocation. SROs, by contrast, rely primarily on periodic audits by SRO-appointed auditors and have limited enforcement tools compared to FINMA.
The rationale for the transfer is risk-proportionate supervision. FINMA determined that the systemic importance and risk profile of payment and crypto institutions — which custody client assets, facilitate payment transfers, and provide market-making services — warrant the higher-intensity supervision that FINMA direct oversight provides. The SRO framework, originally designed for lower-risk financial intermediaries such as independent asset managers, is deemed insufficient for the operational complexity and client-facing risk of modern crypto businesses.
For companies currently operating under SRO membership, the transition will require preparation: enhanced internal controls, upgraded compliance systems, more detailed reporting capabilities, and potentially additional capital to meet FINMA’s organizational requirements. Companies should begin transition planning well before the new framework takes effect to avoid disruption to their operations.
Impact on Specific Business Models
The new license categories will affect different crypto business models differently. Stablecoin issuers — including Sygnum Bank’s DCHF operation and any future CHF stablecoin projects — will need to ensure their operations align with the payment institution license requirements. Sygnum, as a FINMA-licensed bank, already meets supervisory standards exceeding the payment institution requirements; the primary change is the formal classification of stablecoin issuance as a payment institution activity.
Crypto exchanges operating in Switzerland — platforms that facilitate buying and selling of cryptocurrencies — will need to assess whether they require a crypto institution license (for client-facing trading) or a payment institution license (if their primary activity involves payment processing). Many exchanges perform both functions, and the proposal’s framework may require separate license applications or a single combined license depending on the dominant activity profile.
Wallet providers that custody client crypto assets will require a crypto institution license. This represents a significant regulatory upgrade for companies currently operating under SRO membership or the fintech license. Hardware wallet manufacturers that provide non-custodial solutions remain outside the licensing perimeter — the crypto institution license targets only custodial wallet services where the provider holds client private keys.
Market makers — entities providing liquidity in crypto asset markets — will need a crypto institution license. This captures both traditional market-making firms that have expanded into crypto and crypto-native market makers that provide liquidity on decentralized and centralized exchanges. The capital requirements and conduct rules for crypto institution-licensed market makers will be calibrated for the specific risk profile of crypto market-making, including the elevated volatility and counterparty risks inherent in crypto markets.
Comparison with EU MiCA Licensing
The proposed Swiss license categories share structural similarities with the EU’s MiCA framework but differ in important details. MiCA creates a Crypto-Asset Service Provider (CASP) authorization that covers a broad range of crypto activities including custody, exchange, portfolio management, and advisory services. The Swiss proposal, by contrast, creates two separate license categories (payment institution and crypto institution) with distinct activity perimeters.
A key difference is passport rights. Under MiCA, a CASP authorized in one EU member state can operate across the entire EU/EEA under the passport mechanism. Swiss licenses provide no such passporting — Swiss-licensed entities must obtain separate authorization in each foreign jurisdiction where they operate. AMINA Bank addressed this by obtaining a MiCA license from the Austrian FMA in November 2025, enabling EU-wide services through its AMINA EU entity. Swiss companies seeking EU market access will need to obtain MiCA authorization in addition to their Swiss license.
The Swiss Bankers Association (SBA) has highlighted competitive implications. If the proposed separate-entity requirement for banks issuing stablecoins makes Swiss stablecoin issuance more cumbersome than under MiCA, Swiss banks may face a competitive disadvantage relative to EU counterparts that can issue stablecoins directly. The SBA demands direct stablecoin issuance rights for banks, challenging the proposed requirement that banks establish separate legal entities for stablecoin activities.
Capital Requirements and Prudential Standards
The proposal establishes prudential standards for both license categories, though the specific capital requirements are expected to be detailed in implementing ordinances rather than the primary legislation. For payment institutions, capital requirements will reflect the risk profile of deposit-taking and stablecoin issuance — including reserve adequacy, liquidity requirements, and operational risk capital. The removal of the CHF 100 million deposit cap means that payment institutions may hold significantly larger client deposit pools than fintech licensees currently manage, necessitating proportionately higher capital buffers.
For crypto institutions, capital requirements will reflect custody risk (the risk of loss or theft of client crypto assets), trading risk (the risk arising from market-making and proprietary trading activities), and operational risk (including cybersecurity risk, smart contract risk, and key management risk). These requirements will be calibrated relative to existing securities firm capital standards, adjusted for the specific risk characteristics of crypto operations.
Both license categories will be subject to organizational requirements including fit-and-proper testing of directors and senior management, adequate internal control systems, IT security standards, and business continuity planning. These requirements ensure that licensed entities have the governance infrastructure and operational resilience to justify the regulatory trust conferred by a FINMA license.
Timeline, Transition, and Strategic Planning
The consultation period for the October 2025 proposal closed in February 2026. Parliamentary debate is expected through 2026, with implementing ordinances developed in parallel. The new license categories are projected to take effect around 2027, with transition periods allowing existing licensees to convert to the appropriate new category.
For Crypto Valley companies, strategic planning should begin now. Companies should assess which license category applies to their activities, identify any gaps between their current compliance infrastructure and the anticipated requirements, and develop implementation plans for the transition period. Companies that currently hold fintech licenses will need to convert to payment institution or crypto institution licenses depending on their activity profile. Companies operating under SRO membership only may need to apply for a FINMA license for the first time.
The 2025 proposal will affect all 1,749 blockchain companies in Crypto Valley to varying degrees. Companies providing purely non-custodial services (software development, non-custodial wallet infrastructure, blockchain consulting) remain outside the licensing perimeter. Companies providing custodial, exchange, or payment services — the majority of client-facing crypto businesses — face a regulatory transition that will define their operational framework for the next decade.
For the current FINMA token classification framework that these proposals will modify, see our classification analysis. For the DLT Act infrastructure enabling tokenized securities, see our framework analysis. For entity profiles of companies that will be affected by the new license categories, visit Crypto Valley. For the regulatory comparison with EU MiCA, see our Switzerland vs EU MiCA analysis. For DAO governance implications, explore how the new categories affect foundation and association activities. Track regulatory developments on our dashboards. For AML/KYC supervision changes under the new framework, see our compliance analysis. For external reference, consult the Swiss Federal Council’s consultation documents.