The Swiss Financial Market Supervisory Authority FINMA has published its Supervisory Notice 01/2026 on the custody of crypto-based assets. The new requirements demand significantly intensified due diligence from Swiss financial institutions when selecting custody partners.
Institutions must now prove that foreign custodians offer equivalent bankruptcy and investor protection standards. The notice addresses banks, securities firms, asset managers of collective investment schemes, and portfolio managers in particular. They must ensure that "crypto-based assets" are held only with appropriately supervised custodians. FINMA identifies significant risks: operational risks of distributed ledger technology, cyberattacks, inadequate protection of private keys, and dependencies on third-party custodians. After the debacle surrounding stablecoin regulation, the industry is not happy about the tightening.
Direct liability for Swiss institutions
Supervisory Notice 01/2026 demands clear accountability. The selection and monitoring of third-party custodians remains entirely with the supervised Swiss institution. Even when custody is outsourced abroad, the institution bears full liability. This direct liability is designed to ensure that client funds remain protected even in the event of a foreign partner's bankruptcy.
When delegating to foreign custodians, FINMA requires an equivalence assessment. Foreign law must offer comparable bankruptcy protection to Switzerland. In addition, the foreign custodian must be subject to equivalent supervision. For staking services, FINMA refers to its separate Supervisory Notice 08/2023.
Criticism of regulatory approach
Luzius Meisser, board member of Bitcoin Suisse and member of the Swiss Blockchain Federation's expert council, sharply criticizes FINMA. He argues that the supervisory authority does not understand the technology's potential. A core advantage of blockchain is independence from banks and the traditional financial system. With Supervisory Notice 01/2026, FINMA prescribes precisely this dependency.
Meisser also sees FINMA on legally thin ice. The law underlying the ordinance regulates only categories of financial instruments listed in the law. Cryptocurrencies are not among them. The question of whether FINMA even has the legal basis to regulate crypto assets remains unresolved. The new notice does not directly affect crypto service providers themselves, but restricts asset managers. FINMA now requires asset managers to hold managed crypto assets with banks or other directly supervised financial intermediaries. This significantly narrows the selection of available custodians.
Regulatory competition and location disadvantages
The Swiss crypto industry faces international competition. The EU created a unified regulatory framework with the Markets in Crypto-Assets Regulation (MiCA) in June 2024. Full enforcement occurred in December 2024. Over 40 licenses for crypto asset service providers have already been granted. National transitional periods expire in July 2026.
Switzerland is preparing a comprehensive revision of the Financial Institutions Act. The Federal Council opened consultations in October 2025 to introduce two new licensing categories: payment institutions and crypto institutions. The crypto institution license is intended to provide a lighter regulatory framework than that for securities firms. The consultation runs until February 6, 2026. The revised regulatory framework is unlikely to enter into force before 2027.
Crypto companies are increasingly migrating to other jurisdictions. The United Arab Emirates recorded a 67 percent increase in new licenses in the first quarter of 2025 compared to the prior-year period. Over 1,800 crypto companies with more than 8,600 employees are now based in the UAE. Major players such as BlackRock, Circle, Coinbase, and Ripple are expanding into the Emirates.
Equal treatment of traditional and digital financial institutions?
Critics fault different treatment of traditional banks and young crypto service providers. FINMA applies stricter standards to crypto firms than to established financial institutions. Supervisory deficits at Credit Suisse are cited as an example. There, supervision failed, while crypto companies face higher compliance requirements.
FINMA emphasizes that Switzerland gained an advantage through early blockchain regulation. With the DLT Umbrella Act of 2021, Switzerland created improved bankruptcy protection for crypto-based assets. Supervisory Notice 01/2026 builds on this development and specifies the requirements.
The industry is by no means satisfied with recent developments. Representatives point particularly to the welcoming stance of the United States. In Switzerland, the regulator now only points to risks, not the opportunities of the technology. Institutions must now assess whether their custody arrangements meet regulatory requirements. Otherwise, adjustments are necessary. How this affects Switzerland as a crypto hub remains to be seen.
