FINMA Approves First Swiss Cryptocurrency Fund

The Swiss Financial Market Supervisory Authority (FINMA), Switzerland’s government authority responsible for financial regulations, announced today that it has approved the country’s first cryptocurrency fund.

The official announcement released by FINMA states that the authority has approved the cryptocurrency fund according to Swiss law. The Crypto Market Index Fund is restricted to qualified investors and invests mainly in cryptocurrency assets.

The latest announcement from FINMA is a major development for the Swiss cryptocurrency market. The European country is one of the most attractive destinations for global crypto companies. Since the start of 2021, several cryptocurrency firms around the world have launched exchange-traded products (ETPs) on the Swiss Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term.

“For the first time, FINMA has approved a Swiss fund that invests primarily in cryptocurrency assets, that is to say in assets based on the Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term or distributed ledger technology. The fund concerned goes by the name of the 'Crypto Market Index Fund', an investment fund according to Swiss law belonging to the category 'other funds for alternative investments' with particular risks. Distribution of this fund is restricted to qualified investors,” FINMA mentioned.

Switzerland’s Cryptocurrency Ecosystem

Earlier this month, SIX Digital Exchange received regulatory approval from FINMA to operate a stock exchange and a central securities depository for digital assets in Switzerland. Additionally, the European country is home to some of the world’s leading cryptocurrency asset management firms. In February 2021, 21Shares AG, a Switzerland-based cryptocurrency ETP issuer, crossed $1 billion in digital assets under management across its 12 different crypto ETPs. The Swiss digital assets management firm mentioned that cryptocurrency assets are getting popular among the country’s wealth management firms and private banks.

In the recent press release, FINMA outlined that the authority welcomes innovation in the financial markets. “In order to facilitate serious innovation, FINMA applies the existing provisions of financial market laws in a consistent technology-neutral way, i.e., in keeping with the 'same risks, same rules' principle. In doing so, it makes sure that new technologies are not being used to circumvent the existing rules and that the protective goals of financial market legislation are preserved,” the Swiss regulator highlighted.