Switzerland is displaying its pro-blockchain prowess once again as the Swiss Federal Council reveals intentions to “further improve framework condition for blockchain”
The press release of 14 December published by the State Secretariat for International Finance (SIF) reflects on a meeting held on 7 December 2018, where it revealed and adopted a regulatory report titled “Legal framework for distributed ledger technology and blockchain in Switzerland – An overview with a focus on the financial sector.”
The 162-page document was not drafted with laws created specifically for blockchain, instead, they nuanced and tweaked the pre-existing frameworks in place, adapting it to blockchain and its derivatives. External stakeholders such as the Crypto Valley Association in Zug provided consultation on the report.
According to the press release, the report indicated that Switzerland’s frameworks are “well-suited to dealing with new technologies,” though it sees room for greater potential, the release writes, “Nevertheless, there is still a need for selective adjustments.”
The SIF highlights the future potential of blockchain technology not only in the financial sector but also in “other sectors of the economy”, after which it states that “the Federal Council wishes to exploit the opportunities offered by digitalization for Switzerland. It wants to create the best possible framework conditions so that Switzerland can establish itself and evolve as a leading, innovative and sustainable location for fintech and blockchain companies.”
As the report offers comprehensive clarification on actions to be taken and “proposes concrete measures”, the Federal Council finds that there is “no need for fundamental adjustments to the Swiss legal framework,” however “specific adjustments” do need to be made. As such, the Federal Council reports that it has asked the Federal Department of Finance (FDF) and the Federal Department of Justice and Police (FDJP) to create a consultation draft by Q1 of 2019.
This will be drawn up to assess particular areas, as per the press release:
- In civil law, increase legal certainty for the transfer of rights by means of digital registers,
- In insolvency law, further clarify the segregation of crypto-based assets in the event of bankruptcy and examine the segregation of data with no asset value,
- In financial market law, devise a new and flexible authorization category for blockchain-based financial market infrastructures,
- In banking law, reconcile the bank insolvency law provisions with the adjustments in general insolvency law, and
- In anti-money laundering law, more explicitly anchor the current practice of making decentralised trading platforms subject to the Anti-Money Laundering Act.
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