The Capital Markets and Technology Association has instituted new guidelines for the management and custody of digital assets. Earlier this week, the Swiss blockchain regulator announced the Digital Assets Custody Standard, which will help to guide digital asset storage and custody in the space moving forward.
The Need for a Security Assurance
As the association claimed, the new draft of guidelines will help to provide a distinction between the storage of digital assets for fiat currencies, while also providing security and operational requirements for digital asset custody services too.
Fedor Poskriakov, the Association’s General Secretary, pointed out that the new draft will be the first step towards providing a unified standard for crypto custody and management services in the country. He added that it would also be a stepping stone to the addition of several crypto-based financial infrastructures, all of which would help to bring the benefits of digitization to the traditional financial space.
In the document, the Association codified that digital asset storage is markedly different from the storage of traditional financial assets. For one, the latter relies more significantly on the use of centralized storage infrastructure – a feature which, although flawed, provides a degree of certainty.
In the crypto space, however, custody services will need to assure users of the security and reliability of their decentralized storage infrastructure.
If this can be done, the Association believes that businesses and investors can finally begin to enjoy the benefits of decentralized asset storage systems. In particular, small and medium businesses would be able to conduct securities trading and gain entry into highly restricted markets.
Switzerland’s Continued Crypto Rise
The guidance marks the second significant legislation passed by the CMTA for Switzerland’s crypto market. Back in October 2018, the association published anti-month laundering (AML) guidelines for the country’s crypto and blockchain space.
At the time, the Association tagged the new measures as a great way to open the door for digital asset tokenization. The guidance was rather encompassing, as it included regulations for both digital asset issuers (including and especially ICO administrators), as well as banks, securities dealers, and other intermediaries that will deal with crypto issuers and investors.
While the standards weren’t statutory, the CMTA explained that they were developed in line with several legislative frameworks- including the Swiss Anti-Money Laundering Act (AMLA), the Swiss Anti-Money Laundering Ordinance (AMLO), and FINMA’s Anti-Money Laundering Ordinance (AMLO-FINMA).
The regulatory progress has so far worked out for Switzerland, as the country is now seen as one of the most progressive hotspots for crypto startups and companies in the world. The European nation is also on the cusp of launching a digital currency, much to the anticipation of several industry insiders.
Last month, Daniel Haudenachild, the President of the Swiss Crypto Valley Association, explained in an interview that a government-backed digital asset is the next logical step for the country to go as far as digital currency innovation is concerned.
He went on to explain that while private firms have done a good job of innovating, governments and central banks would now have to do the same thing in order not to be left behind.