Switzerland to Regulate Blockchain Within Existing Financial Laws

The government of Switzerland wants to accommodate the blockchain sector within its existing financial laws.

The country's Federal Council issued a report on Friday, providing a legal framework for distributed ledger technology, or blockchain,, stating that Switzerland's existing rules are well suited to dealing with such new technologies, but there is still a need for some amendments.

Firstly, the council has proposed an amendment to the country's securities law to increase the legal certainty of crypto tokens.

Because under the country's existing Debt Enforcement and Bankruptcy Act it is not clear whether these assets can be segregated, the council said there is a "Great need for legal certainty" for the parties involved and thus a corresponding change is proposed in the DEBA act.

Further, the government body has proposed the creation of a new "Authorization category" for infrastructure providers in the blockchain sector, and will make amendments to its Financial Market Infrastructure Act accordingly.

Currently, the council has not yet proposed any specific changes, as the central definitions of the terms "Securities" and "Derivatives" in financial market regulations are also relevant for blockchain-based business models, it said.

Regarding the country's Anti-Money Laundering Act, the council said the legislation is currently adequate enough to also cover activities related to cryptocurrencies and initial coin offerings.

The Swiss government has been working on blockchain regulations since 2016, when the country's Federal Department of Finance outlined.

Consultations on regulatory changes for the domestic financial industry to account for fintech including blockchain.

Most recently, Switzerland's Financial Market Supervisory Authority introduced a new fintech license with "Relaxed" requirements that is applicable to blockchain and cryptocurrency-based firms.