In a newly published guidance, FINMA provides clarity on the treatment under Swiss financial market law of staked digital assets from a balance sheet and licensing perspective. Importantly, it provides a path for banks to hold staked client assets off-balance sheet and clarifies the regulatory perimeter for non-bank digital asset service provider.
Staking
On 20 December 2023, the Swiss Financial Market Supervisory Authority (“FINMA“) published its Guidance 08/2023 (the “Guidance”), in which it has laid out how FINMA will interpret financial market laws in relation to the staking of digital assets. As the first formal guidance from Swiss authorities on staking, this document provides valuable insights and clarity for banks, financial institutions, and service providers active in the field of digital assets.
In this context, “staking” generally refers to the process of locking up digital assets on a blockchain network in order to participate in the validation mechanism of the network. Persons who engage in staking earn rewards, generated by the protocol, for providing this service to the network. Staking is relevant to blockchains based on a proof-of-stake consensus mechanism, such as Ethereum.
Swiss banks offering staking services
