Virtual currency wallets often face the legal question of whether they have to operate as a bank or not. Well, not in Switzerland.
Xapo, a bitcoin wallet provider, announced that it has received “conditional approval” from the Swiss financial market watchdog to operate in the country.
“After almost two years of substantial effort and investment, Xapo has received conditional approval from the Swiss Financial Market Supervisory Authority (FINMA) to operate in Switzerland,” Xapo founder and CEO Wences Casares said in a blog post.
The approval hinges on several factors, including the company participating in a self-regulatory organization, among other things. Xapo, however, no longer needs to secure a banking license because FINMA has designated the bitcoin wallet as a “financial intermediary,” according to a Reuters report.
Switzerland already plays host to a number of cryptocurrency companies, but Xapo’s operation as a bitcoin wallet provider had raised questions whether it required a banking license. The company was likely helped by its argument that it does not accept deposits and it won’t serve American customers, citing the legal uncertainty surrounding the digital currency.
Swiss authorities have been vocal in their intent to catch up with the rapidly changing financial technology landscape.
In November, Switzerland’s Federal Department of Finance (FDF) outlined a plan that included a license specifically for fintech companies as well as a regulatory “sandbox” or an innovation area for experimental firms. At the time, FDF said it plans to delve deeper into bitcoin and other digital currencies, as well as other applications for blockchain.
While not coming completely out of the blue, Switzerland’s decision to approve Xapo is a legal foothold that opens the door to other virtual currency wallets that may be eyeing to set up shop in the country, not to mention it could also set an example for other countries to follow.
Current bitcoin price
Bitcoin is once again back on the $900 mark, trading at $917.69 early Monday morning.
