At the end of September 2020, X8 AG submitted its stable coin, X8C, for authorisation with FINMA in order to make the next step toward launching its business operations. Swiss supervisory law recognized stable tokens as distinct financial products requiring their own guidelines as per FINMA’s publication in 2019.



Swiss regulation recognizes different mechanisms underlying stable tokens and provides guidelines respectively. The backing mechanism of stable coins is one of the key elements, because it is in a good part according to this feature that stable tokens are sorted into categories and the type of the required license determined. Precise categorization also depends on the risk profile of an instrument, plus which entity bears the economic risks from it.

Stable tokens as recognized by FINMA are classified as follows: linked to currencies, linked to commodities, linked to real estate and linked to securities. The mentioned factors influence the decisions about whether the backing mechanism can be treated as a deposit under banking law or a collective investment scheme for example. The license required is ruled respectively.



X8C has been analysed in accordance with FINMA standards to establish the most prudent and convenient route for X8 AG to start its stable token business. It has been established that the most streamlined and least complex way is to apply for the authorisation of X8C token only for the time being.

There are several reasons not to pursue the authorisation of other stable tokens until the X8C authorisation has been granted. The main one pertains to the key role the stability mechanism plays in the FINMA’s assessment of stable tokens. X8C’s stability mechanism has been defined in accordance with the legal forms and relevant licenses already supported by Swiss regulation, something that perhaps remains a less precisely defined area for other X8 stable token designs due to the dynamic nature of the mechanism for stability when applied on single currency portfolios. In our view Swiss regulation already accommodates and predicts the type of the design underpinning the X8C, making the request for approval for this token our main focus at this point.

The current application of X8C for FINMA authorisation involves a mechanism of eight currencies, which in the submission to FINMA for the X8C excludes gold due to economic and legal specifics of such a design. The long-term vision of X8C including gold remains firm and the project remains willing to pursue the inclusion of the gold component for the basket backed stable coin in the future.



There are two possible stages of X8C accommodation within the Swiss jurisdiction in the short to medium term. The first stage involves a limitation applied within the regulatory sandbox regime. This type of authorization allows projects to issue stable tokens in total value of up to one million Swiss Francs. According to Swiss regulations a stable token project needs regulatory approval for issuing tokens even when planning to operate within the sandbox environment, a limitation not present for most of the other types of financial projects.

After the regulatory sandbox stage, the next step can be a fintech license which upon approval in Switzerland allows business operations with sums of up to one hundred million Swiss Francs in deposits. The X8 project is aiming to pursue this regulatory path for X8C in a step-by-step manner and by fulfillment of all regulatory requirements necessary for each of the mentioned steps.

The timeline of FINMA informing X8 AG about their response to the project’s submission is generally estimated to be about a quarter of a year, however it may vary depending on processing and time required to fulfill the entire set of conditions necessary before the attainment of such approval.



In reference to the latest overview of the current market environment we have prepared the following table chart, which exemplifies the position of the X8 AG and its flagship X8currency value preservation product in comparison with the Libra Coin by Diem Association.

Further detailed analysis of the mentioned comparison can be found here.



Name Libra Coin X8currency
Project start 18th June 2019 13th January 2018
Focus Portfolio management Risk management
Resemblance IMF’s SDR Independent
Basis Move programming language ARM Artificial Intelligence
Backing Short term Bonds (80%), Cash (20%) Cash (100%)
Nr of Elements 5 (Regulator dependent) 8 plus Gold
Blockchain platform Native blockchain Ethereum
Project’s aim Payment system Payment instrument
Money raised 250 million USD 3,4 million EUR*
Targeted License FMIA, Bank, Fintech Fintech
AML TBD** Cross-border matrix
User base >3bn >1.000
Geo diversification Yes Yes
Utility token No Yes (X8X)
Individual currency coins Yes Yes
Individual ccy coins – Peg 1:1 ARM Artificial Intelligence
G7 guidelines relevance Yes Yes
Reporting standard Basic IFRSs
Underlying regulator FINMA FINMA
Domicile Switzerland Switzerland

*The X8 project raised an equivalent of 3,4 million EUR in Ethereum and Bitcoin, however the actual value converted into FIAT currency was lower.

**Detailed AML concept of Libra Coin does not explain specific points pertinent to Swiss AMLA.



The market of stable coins is still developing rapidly. Currently there is a lack of available regulated multi-currency stable coin solutions. However, in the value preservation sub-segment of the stable coin industry X8 AG and Diem Association are currently simultaneously in the process of requesting the Swiss regulator FINMA for the business operations approval.

Image source:
David Prezelj
David Prezelj

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