The Swiss government is looking to regulate the blockchain within the current financial laws already in place.
Switzerland’s Federal Council provide a legal framework for Blockchain
The Swiss Federal Council released a report on Friday, December 14 providing a legal framework for the blockchain technology. According to the report, the Swiss government is of the view that the current financial rules are well suited to tackle the new technologies even though some improvements are needed.
The report proposed that the securities law in the country should be expanded so as to increase the legal certainty of cryptocurrencies. It stated that “Since an entry in a decentralized 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 addition to that, the council proposes the separation of crypto assets from the insolvent debtors’ total estate in bankruptcy proceedings. This might not be possible due to the current Debt Enforcement and Bankruptcy Act (DEBA) in the country, the council added. For this reason, there is a need for legal certainty for the parties involved and the changes made should be added to the DEBA Act.
Thirdly, the government body is asking regulators to establish a new “authorization category” solely for infrastructure providers in the blockchain sector. This will prompt amendments to the current Financial Market Infrastructure Act. At the moment, the council hasn’t pointed out any specific changes due to the fact that the central definitions of the terms “securities” and “derivatives” in financial market regulations still apply to the blockchain-based business models.
The council also touched the issue of the country’s Anti-Money Laundering Act. The report stated that the existing legislation is enough to cover any ICO and crypto-related activity in the country. It noted that “The general principles of the Anti-Money Laundering Act also apply to crypto-based assets,” and thus there is no need for any fundamental revision at the moment.
Swiss Government looking to position itself strongly with crypto regulations
Regulators in the country have been working on blockchain regulations since 2016 after the Federal Department of Finance announced its plans to regulate the Fintech sector. The report stated that: “Switzerland should position itself as an attractive location for blockchain companies through legal certainty, efficient regulation, and a good reputation.
The different regulatory bodies have been consulting the local financial industry regarding the best ways to regulate Fintech including blockchain and cryptocurrencies. The country’s Financial Market Supervisory Authority (FINMA) recently introduced a new fintech license with fewer requirements, making it easier for blockchain and crypto companies to acquire the license.
The moves have already started paying off as the city of Zug, house to the Crypto Valley has been ranked as the fastest growing tech hub in Europe. The report last week pointed out that the city has experienced a 177 percent increase in the number of tech-related events so far this year. The astonishing rise in the fortunes of the city has to do with the favorable regulations put in place by the Swiss government.