Swiss Regulator Issues Banking License to Two Blockchain Firms

Switzerland’s Financial Market Supervisory Authority (FINMA) has issued banking and securities dealers’ licenses to two new blockchain firms – SEBA Crypto and Sygnum.

This is the first time that such licenses are issued to “pure-play blockchain service providers. The licenses will allow companies to provide services to institutional and professional customers.

“Sygnum’s plans for corporates include the ability to raise new capital by producing asset tokens based on existing financial assets, thereby lowering capital raising costs and improving liquidity for issuers and investors,” the firm has said.

SEBA Crypto said that the license is a “milestone for the entire digital asset market ecosystem,” and that the bank is expected to officially go-live in early October 2019.

“Institutions supervised by FINMA are only permitted to send cryptocurrencies or other tokens to external wallets belonging to their own customers whose identity has already been verified and are only allowed to receive cryptocurrencies or tokens from such customers,” the regulator said, adding:

“FINMA-supervised institutions are thus not permitted to receive tokens from customers of other institutions or to send tokens to such customers.” (Positive)

The Central Bank of Brazil Adopts IMF Guidelines For Crypto Classification

The Central Bank of Brazil has moved to classify bought or sold cryptocurrency assets per International Monetary Fund (IMF) guidelines.

Brazil’s central bank announced its decision on Aug. 26. With the new classification under IMF standards, traded cryptocurrencies will be classified as non-financial products and as such, will be accounted as goods on the central bank’s balance sheet.

A central bank balance sheet, just like a regular bank’s balance sheet, summarizes its financial position, and is made up of assets, equity and liabilities.

Since purchasing and selling cryptocurrency involves the execution of foreign exchange contracts, the central bank considers selling and buying crypto assets in their export and import statistics. Moreover, because Brazil is a net importer of crypto assets, this apparently has contributed to lowering the trade surplus on its balance sheet.

According to  the report, the classification of cryptocurrencies as a good is significant. Recognition of cryptocurrencies as property would purportedly make them eligible to be used as a payment mechanism.

The central bank notes that these classifications were recommended by The Balance of Payments Statistics Committee — an advisory committee to the IMF Statistics Department that focuses on external sector statistics methodology. (Neutral)

Australian Securities Exchange Confirms It’ll Go Blockchain in 2021

The Australian Securities Exchange (ASX) has made new partners to apply blockchain to its registry, settlement and clearing systems (CHESS) in 2021.

The ASX confirmed its anticipation of delivering the CHESS replacement system by 2021, following a new agreement with NYSE-listed tech firm VMware and Digital Asset Holding (DA), according to a press release published on Aug. 26.

According to the report, the ASX has signed a three-party memorandum of understanding (MoU) with the firms to collaborate on blockchain projects in Australia and New Zealand as well as to jointly develop the application to replace its equities clearing and settlement system.

The MoU also includes the support of the open-source smart contract programming language called DAML. Developed by DA, a firm partly-owned by the ASX, DAML is used to build distributed applications.

ASX’s plans for replacing the CHESS with blockchain were first revealed in 2017 in order to boost the CHESS with major blockchain-powered efficiencies such as faster transactions, improved security and reduced costs.

The exchange initially planned to deliver the system by 2020 but faced a six-month delay as blockchain implementation required more time to user development and testing.

Peter Hiom, ASX Deputy CEO, said that the new partnership confirms the company’s belief in the potential of distributed ledger technology as they remain on track to deliver the CHESS replacement system in March-April 2021. (Positive)