The Swiss Government Is Improving Its Blockchain Regulatory Framework via Financial Laws

During the last couple of years, Switzerland has positioned itself as a crypto and blockchain-friendly country, granted its positive regulatory framework for the technology. In fact, the city of Zug is often referred to as the world’s Crypto Valley, in analogy to the San Francisco Silicon Valley.

Despite already having a cohesive framework, the Swiss government is reportedly planning to further accommodate the blockchain industry, by improving its financial laws. With this in mind, the Swiss Federal Council released a report, stating that current laws are well-suited for dealing with the tech, yet there is still room for improvements. As such, several suggestions were made.

To kick things off, the council proposed a change to the Swiss law on securities, stating that: “Since an entry in a decentralised register accessible to interested parties can create publicity similar to the ownership of a security, it seems justified to attach similar legal effects to this entry.” In other words, the suggestion attempts to make the process of categorizing tokens as securities less confusing.  

A second suggestion attempts to separate crypto-based assets from the estate associated with an insolvent debtor. The council believes that there is legal confusion here, since the Swiss Debt Enforcement and Bankruptcy Act doesn’t explain whether digital assets should be included in the estate.

When referring to the Anti-Money Laundering Act, the council mentioned that the current laws are detailed-enough and well-suited in regulating activities associated with digital currencies. However, the council believes that more effort should be focused on implementing AML requirements for decentralized trading platforms. Not only this, but the FDF was tasked with determining whether AML law should be applied to several types of crowdfunding as well.

Apart from these, the council proposed several other amendments to the Financial Market Infrastructure Act, in an effort to ensure that blockchain and crypto-based investments are possible, and straight-forward from a regulatory point of view.

Based on everything that has been outlined so far, the government of Switzerland has first started working on crypto and blockchain laws in 2016. With these suggestions, the Swiss Federal Council has reiterated its wish to make the country a hub for blockchain and crypto-related activities. After all, companies and individuals tend to avoid investing in countries where there is regulatory confusion.