Zach Anderson
Feb 06, 2026 13:31
Circle’s response to Swiss stablecoin consultation calls for equivalence pathway for regulated foreign stablecoins, warning current draft risks isolating Switzerland from $300B market.
Circle submitted its formal response to Switzerland’s Federal Council consultation on stablecoin regulation on February 6, warning that the proposed framework could effectively shut out foreign-issued stablecoins from the Swiss market—including Circle’s own USDC.
The USDC issuer’s central objection: Switzerland’s draft rules would treat all non-Swiss stablecoins the same as unbacked crypto assets, regardless of whether they’re fully reserved and regulated elsewhere. With the global stablecoin market now exceeding $300 billion, Circle argues this approach risks cutting Switzerland off from a major chunk of cross-border payment activity.
What Switzerland Is Proposing
The consultation, which closed February 6, 2026, covers proposed amendments to Switzerland’s Financial Institutions Act. The changes would create new licensing categories for payment institutions and crypto firms, plus establish prudential rules for fiat-backed stablecoins—what the Swiss call “wertstabile kryptobasierte Zahlungsmittel.”
Circle actually supports most of the framework’s core elements: full reserve backing requirements, segregated client assets, enforceable redemption rights, and proportionate capital rules. The company also praised Switzerland’s decision to keep non-custodial wallet software unregulated—a position not all jurisdictions have taken.
The sticking point is market access for foreign stablecoins.
The Equivalence Question
Circle wants Switzerland to create an “equivalence-based regulatory pathway” that would recognize stablecoins regulated under comparable foreign regimes. Under this model, FINMA would assess whether a third-country framework meets broadly similar objectives and supervisory standards—without requiring identical rules.
The company points to the EU’s MiCA regulation, which treats e-money tokens as money-like instruments, and the U.S. GENIUS Act as examples of comparable frameworks. If Switzerland recognized these regimes, stablecoins issued under them could be treated as money-like instruments for accounting and operational purposes.
As a fallback, Circle suggests a narrower registration or recognition process—anything to avoid the default classification of regulated foreign stablecoins as unbacked crypto.
Context and Timeline
This consultation follows years of Swiss regulatory development on stablecoins. FINMA published comprehensive guidance in July 2024 addressing default guarantees and money laundering risks associated with stablecoin issuance. The regulator specifically flagged concerns about issuers using bank guarantees to avoid full banking licenses.
The Swiss Federal Council launched the current consultation on October 22, 2025, partly responding to gaps exposed by the EU’s MiCA implementation. The new “Payment Instrument Institution” license category would replace the existing fintech license for stablecoin issuers.
The Federal Council expects to submit a dispatch to Parliament in the second half of 2026 at the earliest. For Circle and other foreign stablecoin issuers, the equivalence question will determine whether they can operate meaningfully in the Swiss market—or watch from the sidelines as domestic players capture the opportunity.
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