SRO vs. Swiss LightBank-Fintech License for Crypto Business When embarking on a crypto-related project in Switzerland, one of the critical decisions involves choosing the appropriate regulatory framework to operate within. For more information do not hesitate to contact us at connect@swissfintechpro.com
The two primary options available are obtaining membership in a Self-Regulatory Organization (SRO) or applying for a Swiss LightBank-Fintech License. There is a third option the Swiss Foundation, but its only use is in general for Initial Coin Offering project.
Click Here to read our post on Swiss Foundation in the context of ICO
Each of these regulatory paths offers distinct advantages and requirements, making the choice highly dependent on the specific needs, scale, and scope of the project. This introduction will explore key considerations to help guide the decision between opting for SRO membership or pursuing a Swiss LightBank-Fintech License.
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Features/Requirements | Swiss SRO | Swiss LightBank-Fintech License |
| Ready-Made Availability and Cost | Ready-made from 200,000 CHF | None; must start from scratch |
| Setup Time | 2 to 3 months | 8 to 10 months |
| Purpose | To oversee non-banking financial intermediaries. | To promote innovation by easing banking regulations for smaller institutions. |
| Regulatory Authority | FINMA (indirectly, as SROs are recognized by FINMA) | FINMA directly. |
| Main Activities | Financial advice, Payment transactions, Exchange services, Credit transactions, Trading in gold, precious metals, and commodities, Managing securities | Accepting public deposits up to 100 million CHF (without interest or investments. Issuing electronic money. Executing payment transactions. Debit card services. Financial Advice. |
| Deposit Cap | Not typically involved in accepting deposits. | Up to 100 million CHF. Crypto Assets Unlimited |
| Crypto-Related Services | May include if approved: Trading, exchange, brokerage. Custodial and non-custodial wallet services. Staking services, offline and online. Crypto or fiat payment and merchant solutions. Crypto asset collateralized loans. Staking-backed loans. Crypto-related advisory services | May include if approved: Trading, exchange, brokerage. Custodial and non-custodial wallet services. Staking services, offline and online. Crypto or fiat payment and merchant solutions. Crypto asset collateralized loans. Staking-backed loans. Crypto-related advisory services |
| Issuing of IBAN/Electronic Money | Not standard; dependent on specific SRO rules. | Yes, included. |
| Innovative Financial Products | Depends on the scope of the SRO and specific member company activities. | Encouraged, especially those involving fintech solutions and crypto assets. |
| Licensing Requirements | Must comply with the anti-money laundering act and specific SRO rules. | Requires strict adherence to regulatory requirements by FINMA, with a focus on safeguarding customer deposits. |
An SRO membership is typically geared towards non-banking financial intermediaries looking to comply with regulatory standards, particularly concerning anti-money laundering (AML). This option is well-suited for smaller to medium-sized enterprises that focus on financial services but do not handle substantial public deposits. The advantage of an SRO is its quicker setup time and lower entry costs compared to obtaining a full banking license. With ready-made SRO entities available from around 200,000 CHF and a setup time of 2 to 3 months, this route is efficient for businesses eager to launch promptly without the extensive regulatory scrutiny typical of full banking licenses.
On the other hand, a Swiss LightBank-Fintech License, often simply referred to as a “Fintech License,” is designed to facilitate innovation in the financial sector. This license allows entities to accept public deposits up to 100 million CHF, though these funds must not be invested or attract interest. It is particularly appealing for projects that require greater credibility and the capability to handle larger volumes of public deposits safely. The Fintech License demands a more substantial commitment in terms of both time and compliance, with setup durations ranging from 8 to 10 months and stringent regulatory oversight directly from the Swiss Financial Market Supervisory Authority (FINMA).
Choosing between an SRO and a LightBank-Fintech License often comes down to several key factors:
Scale of operations and need for public deposit handling:
Projects expecting to manage significant public deposits may lean towards a Fintech License.
Entities that prioritize quick market entry might prefer the SRO route due to its faster setup.
Consider whether the project aims to evolve into more traditional banking services, which could benefit more from the credibility and capacity offered by a Fintech License.
Cost considerations:
Initial and ongoing costs can be significantly different, with the SRO being less expensive and faster to set up.
The choice between an SRO and a Swiss LightBank-Fintech License for a crypto-related project should be based on strategic business considerations, regulatory requirements, and the specific financial services the project intends to offer. Each option provides unique benefits, and the decision should align with the project’s overall goals and regulatory comfort level. Do not hesitate to contact us at connect@swissfintechpro.com
