The Swiss financial regulator will in future ban anonymous transactions of bitcoins and other virtual currencies. It is causing excitement in the industry.
According to their name and their intention, virtual currencies like Bitcoin should be “cryptic” – secret, of unclear origin. Therefore, they are also a popular means of money laundering and covert financing. The Swiss financial regulator (Finma) now wants to put an end to this in its area of responsibility and requires an “address slip” for every transaction. This is making waves in the industry.
Although the announcement was made on August 26, 2019, it is only now really being noticed by the players in this sector and is provoking some violent reactions. Critics fear a paradigm shift, speak of the “end of crypto payments”, a “technology-discriminating practice” and a location disadvantage for the Swiss banking center.
In fact, the federal supervisory authority now applies the same “travel rule” to transactions with cryptocurrencies that already applies to banks’ normal payment transactions and makes binding information on the sender and beneficiary for each order. This is intended to enable verification and comparison with sanction lists. The introduction of this so-called “Travel Rule” is not an invention of Finma, but essentially implements the guidelines agreed in June 2019 by the OECD working group “Financial Action Task Force on Money Laundering”. The aim of the agreement is to better combat money laundering and terrorist financing.
Decision corresponds to the “general weather situation”
So there are also more sober voices: According to the head of the blockchain department of management consultancy PwC, Daniel Diemers, this step corresponds to “the general weather situation”. The discussions of the International Monetary Fund, the Bank for International Settlements, the ECB and the European Financial Market Authority went in the same direction. After all, traditional banks are also not allowed to process anonymous payments. However, it is still unclear how technically the new regulation can best be implemented for Switzerland. The travel data could be included in the blockchain or noted centrally and then linked to the chain.
When it comes to secrecy, the founder and CEO of Token Suisse, Alain Kurz, pours plenty of water into the wine, because “although many investors believe that Bitcoin can be used to pay anonymously, the opposite is the case.” This guarantee would at most offer private coins like the Monero. With this digital money, most payments would now be processed in the notorious Darknet.