In guidelines published on February 16, the Swiss Financial Market Supervisory Authority (“FINMA“) sets out how it intends to apply financial market legislation in handling enquiries from initial coin offering (ICO) organizers. The guidelines also define the information FINMA requires to deal with such enquiries and the principles upon which it will base its responses, creating clarity for market participants.

In particular, the guidelines contain very helpful definitions of (i) “Payment Tokens,” which are synonymous with cryptocurrency and have no further functions or links to other development projects, (ii) “Utility Tokens,” which are tokens which are intended to provide digital access to an application or service, and (iii) “Asset Tokens,” which represent assets such as participations in real physical underlyings, companies, or earning streams, or an entitlement to dividends or interest payments — in terms of their economic function, Asset Tokens are analogous to equities, bonds or dividends. That being said, FINMA noted that “hybrid forms are possible”. Release.