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The fintech licence under Article 1b of the Banking Act

Legislative history and content

The third element of the Federal Council's programme, the fintech licence, was adopted by Parliament on 15 June 2018 as part of the legislative package that also produced the Financial Services Act and the Financial Institutions Act. It became available for applications on 1 January 2019.1 The licence is regulated in Article 1b of the Banking Act and allows its holder to accept public deposits up to a maximum of CHF 100 million, on condition that these deposits are neither invested nor paid interest. The holder must have its registered office and conduct its business activities in Switzerland.2

The model behind the licence is that of an institution that holds client money without engaging in maturity transformation. A traditional bank takes short-term deposits and lends them for longer periods. That transformation is the source of its profitability and of the systemic risks that justify capital and liquidity regulation. A fintech institution under Article 1b performs only part of the bank's function: it keeps balances for payment, settlement or custody purposes. Since the deposits are not lent out, the legislature considered it possible to apply lighter requirements. The minimum capital was fixed at CHF 300,000 or three per cent of the public deposits held, whichever is higher.3 Holders are exempt from the Capital Adequacy Ordinance and the Liquidity Ordinance, draw up their accounts under the general rules of the Code of Obligations and undergo a simplified audit.4

A significant feature of the licence, often overlooked by founders, is the absence of depositor protection. Deposits held by a fintech institution are not covered by the Swiss scheme that protects bank deposits up to CHF 100,000 per client, and customers must be informed of this before they deposit funds.5 The DLT Act later extended the scope of the licence so that it also covers the collective custody of crypto-based assets. FINMA's description of the licence therefore now refers to persons who accept client deposits up to CHF 100 million or take crypto-based assets into collective custody. FINMA also explains the alternatives by which a business can avoid the licence altogether: deposits secured by a bank guarantee, deposits of no more than CHF 3,000 per person, or storage of each customer's crypto-assets on individual blockchain addresses.6

The holders of the licence

The practical reception of the fintech licence was modest. FINMA had hoped to grant the first licence in the first half of 2020, observing that most enquiries came from providers of payment and custody services.7 The first licence went to Yapeal, a Zurich-based digital bank that announced the award in March 2020. Its co-founder Andy Waar described the company as introducing “a completely different style of banking” and presented the licence as a path towards a full banking licence at a later stage.8 The published list of licence holders confirms how small the circle has remained. As at 28 September 2026 it names six institutions: Audax Solutions AG, Relio AG, SR Saphirstein AG and Yapeal AG, all in Zurich, together with Bivial AG in Zug and Sequence SA in Geneva.9

The concentration of four of the six licence holders in Zurich is itself a finding. It reflects the availability of banking talent, compliance professionals, audit firms and banking partners in the city. A fintech institution cannot operate without a correspondent bank that holds its client money, provides access to payment systems and accepts the reputational risk of a young counterparty. Zurich offers more potential partners of this kind than any other Swiss location. The regulatory relationship with FINMA in Berne and the audit relationship with firms whose financial services practices are based in Zurich add to the attraction.

Why the licence had few takers

Several reasons explain why the fintech licence attracted so few applicants. The first lies in its core restriction. A business that may neither invest client money nor pay interest on it can earn revenue only through fees, and Swiss retail customers are accustomed to banking relationships that carry no explicit account fee. The prohibition of maturity transformation removes the most profitable part of banking. The second reason is the licensing process itself. Although the licence was described as lighter than a banking licence, applicants still had to demonstrate a proper organisation, risk management, compliance with anti-money-laundering rules, fit and proper management and an audit firm willing to accept the mandate. Industry associations later criticised the duration of FINMA procedures, which in the crypto sector could reach eighteen to twenty-four months.10

The third reason concerns the alternatives. Many business models could be structured to avoid deposit-taking altogether, for instance through a bank guarantee or by partnering with an existing bank that holds the client money in its own name. For crypto businesses the self-regulatory route under the Anti-Money Laundering Act remained available for many activities: an exchange service or a non-custodial wallet provider could operate on the basis of membership of a self-regulatory organisation without any licence from FINMA. A fourth reason is that the fintech licence was not recognised abroad. It conferred no passport into the European Union and was unknown to most foreign banking partners, which limited its value for firms with international ambitions.

The Federal Council drew the consequences in October 2025, when it proposed to replace the fintech licence with a new category of payment instrument institution without the CHF 100 million ceiling. That proposal is discussed in section VI. For the history of the Swiss fintech regime, the fintech licence remains an instructive example of a well-intentioned regulatory innovation whose economic conditions were set too narrowly for the market it was meant to serve.

Notes

  1. FINMA, “Developments in FinTech”, dossier, https://www.finma.ch/en/documentation/dossier/dossier-fintech/entwicklungen-im-bereich-fintech/. The dossier records the parliamentary approval of the fintech licence on 15 June 2018 and the operation of the innovation area with deposits up to CHF 1 million since August 2017. ↩
  2. FINMA, “FinTech licence: FINMA publishes guidelines”, 3 December 2018, https://www.finma.ch/en/news/2018/12/20181203-aktuell-fintech-bewilligung/. FINMA also offered prospective applicants meetings before the formal submission of an application. ↩
  3. PwC Switzerland, “Fintech License – FINMA publishes Guidelines”, https://www.pwc.ch/en/insights/regulation/fintech-license.html. PwC lists the minimum capital requirement and the elements of organisation, risk management, compliance and accounting that applicants must demonstrate. ↩
  4. Akin Gump Strauss Hauer & Feld, “Switzerland: New FinTech Regulation”, https://www.akingump.com/en/insights/alerts/switzerland-new-fintech-regulation (on the relief from capital adequacy and liquidity rules, accounting and audit). ↩
  5. FINMA, “FinTech licence”, https://www.finma.ch/en/authorisation/fintech/fintech-bewilligung/ (accessed September 2026), which states that in the bankruptcy of a fintech institution client assets are neither privileged nor protected by deposit protection and that clients must be informed of this under the Banking Act and the Banking Ordinance. ↩
  6. FINMA, “Fintech”, authorisation page, https://www.finma.ch/en/authorisation/fintech/. The page contrasts the fintech licence with the banking licence, which is required when deposits are accepted from more than twenty clients without the limitations of Article 1b. ↩
  7. FINMA, “Innovation and supervision 2019”, dossier, https://www.finma.ch/en/documentation/dossier/dossier-fintech/innovation-und-aufsicht-2019/. ↩
  8. swissinfo.ch, “Switzerland awards first fintech banking license”, 13 March 2020, https://www.swissinfo.ch/eng/business/yapeal-successful_switzerland-awards-first-fintech-banking-license/45614448. ↩
  9. FINMA, “List of persons licensed by FINMA pursuant to Article 1b BA (FinTech licence)”, https://www.finma.ch/en/~/media/finma/dokumente/bewilligungstraeger/pdf/fintech.pdf?la=en (list as at 28 September 2026). ↩
  10. finews.ch, “Stablecoin-Vorlage: Ein wichtiges Zeichen, aber nun muss nachgebessert werden”, 9 December 2025, https://www.finews.ch/news/finanzplatz/70466-stablecoin-bundesrat-finanzinstitutsgesetz-finig-krypto-vernehmlassung-kryptoinstitute-kryptodienstleister-finma-bewilligungsverfahren-innovationsschub-emittenten-hans-kuhn-sbf-cva-sfta-cmta. The article reports the demand of the Swiss Blockchain Federation, the Crypto Valley Association, the Swiss Fintech Association and the Capital Markets and Technology Association that licensing procedures be completed within six months. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.

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