Wednesday, 16 October 2019

In Switzerland, Regulators Eye Payments Over Blockchain

Switzerland’s regulators are mandating that firms conducting business across blockchain conduct AL and KYC due diligence. In Australia, the Securities Exchange is transitioning to blockchain across the next few years.

As reported by CoinTelegraph, Switzerland’s Financial Market Supervisory Authority (FINMA) this week unveiled guidance on the regulatory requirements that govern payments done over blockchain.

Under the guidelines, which cover exchanges, trading platforms and wallet providers, the regulators state businesses are not exempt from standards that tie in anti-money laundering (AML) rules, among other mandates. That’s especially important, according to the market supervisory authority, because there are greater risks tied to money laundering and terrorist financing activities.

In addition, firms working within the blockchain space are also directed to perform Know Your Customer checks and point out suspicious activity to appropriate authorities.

As reported by the site, FINMA had said there are no systems, domestic or international, that can reliably transmit data for blockchain-based payments, and bilateral agreements have not been struck between service providers.

“Should any such agreements or data sharing mechanisms be established in future, [authorities state], they would be required to exclusively involve service providers that are subject to appropriate AML supervision,” reported CoinTelegraph.

Separately, FINMA has approved banking licenses for the blockchain service firms Sygnum AG and SEBA Crypto AG. CCN reported that the two “bridge the gap between functional DLT [distributed legder technology] tech and older, more traditional finance aspects.”

As reported, Sygnum seeks to provide traditional banking and wealth management services across DLT. Sygnum also provides set management, brokerage, credit, and tokenization services. SEBA has focused on asset management, and CCN stated that the longer-term horizon would include offering transaction banking and storage custody services.

Securities Exchange and DLT

In blockchain-related news stemming from Australia, the Australian Securities Exchange (ASX) has said it has teamed with two other companies. Digital Asset and VMware are to build replacement platforms for the Clearing House Electronic Subregister System (CHESS) onto distributed ledger technology.

The agreement comes through a memorandum of understanding.

CoinDesk reported that the exchange has targeted the DLT platform to be in place and operational by spring of 2021. ASX Deputy CEO Peter Hiom has been quoted as stating that the agreement will help it expand both product offerings and service locations across Australia and New Zealand.

“This new partnership is a very positive development that will help us support a wider range of DLT solutions developed by the industry,” he said. “It confirms our belief in the potential of DLT as we remain on track to deliver the CHESS replacement system in March-April 2021.”

The current platform processes transactions totaling 5 billion Australian dollars ($3.4 billion) daily.

In other company-specific news, CoinDesk reported that coin wallet and blockchain explorer provider Blockchain has struck a partnership with BitPay, which processes bitcoin payments.

Blockchain will integrate BitPay’s payment architecture into its wallet service. The integration will let wallet users pay merchants across online options, including mobile. BitPay has said it processes about $1 billion in bitcoin transactions annually.


source: pymnts.com
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