Zach Anderson Feb 06, 2026 13:31
Circle's response on Swiss stablecoin consultation calls to equivalence path for foreign stablecoins that are regulated, and warns current draft could isolate Switzerland from $300B market.
Circle has submitted its formal response on the Swiss Federal Council's consultation on stablecoin regulations on the 6th of February, warning that the proposed framework may effectively exclude foreign-issued stabilizecoins (including Circle's USDC) from the Swiss Market.
USDC's main objection is that Switzerland's draft regulations would treat all non Swiss stablecoins as unbacked cryptoassets, regardless if they are fully reserved and regulated in other countries. Circle claims that the stablecoin global market is now worth more than $300 billion. This approach could cut Switzerland off from an important chunk of cross border payment activity.
What Switzerland is Proposing
The consultation closed on February 6, 2026 and covered proposed amendments to Switzerland’s Financial Institutions Act. The proposed changes would establish new licensing categories for crypto firms and payment institutions, as well as prudential regulations for fiat-backed "stablecoins"--what Swiss call "wertstabiles kryptobasierte Zahlungsmittel."
Circle supports the majority of core framework elements, including full reserve requirements, segregated assets for clients, redemption rights that are enforceable, and capital rules that are proportionate. The company also praised Switzerland for its decision to leave non-custodial software unregulated, a position that not all jurisdictions take.
The main issue is the market access of foreign stablecoins.
The Equivalence Problem
Circle wants Switzerland create an "equivalence based regulatory pathway", which would recognize stablecoins that are regulated by comparable foreign regimes. This model would allow FINMA to assess whether a country's framework is broadly similar in terms of objectives and supervision standards, without requiring the same rules.
The company cites the EU's MiCA Regulation, which treats electronic money tokens as money like instruments, and U.S. GENIUS Act is an example of a similar framework. Stablecoins could be treated like money for accounting and operational reasons if Switzerland recognized these regimes.
Circle suggests that as a backup, a more narrowly defined registration or recognition procedure be used. This would avoid the classification of foreign stablecoins regulated by other countries as unbacked cryptocurrency.
Context and Timeline
This consultation is the result of years of Swiss regulatory developments on stablecoins. FINMA released comprehensive guidance on July 20, 2024, addressing the default guarantees and money-laundering risks associated with stablecoin issuance. The regulator raised concerns specifically about the use of bank guarantees by issuers to avoid obtaining full banking licenses.
The Swiss Federal Council began the current consultation in October 2025. This was partly a response to the gaps revealed by the EU MiCA implementation. The "Payment Instrument Institutions" license category will replace the fintech license currently available for stablecoin issues.
Federal Council anticipates submitting a dispatch to the Parliament by the end of the first half of 2026. Circle and other stablecoin issuers will be able to determine if they can participate meaningfully on the Swiss market based on the equivalence questions. Or, they may have to watch as the Swiss players seize the opportunity.
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