Switzerland Announces Plan For Blockchain Regulation Under Existing Laws

Switzerland blockchain regulation laws Federal Council

The government of Switzerland has announced its plan for regulating blockchain, which it says can be achieved with minor adjustments to existing financial and securities laws.

In a report issued by the Federal Council, the government said existing laws were already well equipped to handle new technologies, including blockchain, and that minimal amendments to the country’s financial regulations could provide sufficient legal structure for businesses and investors.

Addressing securities laws, the Federal Council’s report said that upgrading the legal certainty around crypto tokens would better serve the sector.

“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.”

The government also proposed an amendment to the Debt Enforcement and Bankruptcy Act, to enable crypto assets to be separated from insolvent estates in bankruptcy proceedings, as well as mooted revisions to the Financial Market Infrastructure Act around definitions, such as “derivatives” and “securities,” to incorporate blockchain and cryptocurrency.

The Anti-Money Laundering Act requires no amendment according to the Federal Council, because “the general principles of the Anti-Money Laundering Act also apply to crypto-based assets.”

The news follows the introduction of a new, more relaxed licensing regime for fintech startups, under the Financial Market Supervisory Authority, in a bid to provide a supportive regulatory environment for crypto and blockchain startups.

The government has been considering proposals for regulating blockchain for several years, dating back to 2016, when plans for regulation were first outlined by the Federal Department of Finance.

In 2017, the Federal Council opened a consultation process around the need for and practicalities of regulation. The present plan set out by the council represents the culmination of their work, in bringing a more certain legal structure to the regulation of crypto businesses in the country.

Switzerland has become a hub for blockchain startups, with the region of Zug known as “Crypto Valley” due to the large number of blockchain firms based there.

With the news that blockchain can be regulated largely within existing laws, Swiss blockchain firms will now look forward to the swift introduction of these industry-supportive measures.