Switzerland softens laws for Blockchain

In ensuring the integrity and reputation of Switzerland as a financial center, the county plans to better position the country by exploiting the opportunities offered by digitalization.

The Swiss government has always favored creating the best possible, sustainable operating environment for fin-tech and innovative companies. Seeing the far-reaching potential of the blockchain, Swiss government relaxes laws for blockchain and cryptocurrency.

According to Switzerland’s Federal Council’s report, officials will give discretionary powers to the Swiss Financial Market Supervisory Authority (FINMA) to loosen regulations on decentralized securities trading platforms as long as their activities do not harm investors.

Although the report discusses the risk of cryptocurrencies being used for illegal purposes like the financing of terrorism, it maintains a positive attitude towards the technology.

Proposed Changes:

Switzerland’s Federal Council’s report outlines several modifications to the country’s laws but clarifies that there are no intentions to immediately change financial or insurance industry-related laws, as it considers that blockchain technology is still “in its infancy” when it comes to these sectors.

Switzerland’s Federal Council’s report outlines several modifications to the country’s laws but clarifies that there are no intentions to immediately change financial or insurance industry-related laws, as it considers that blockchain technology is still “in its infancy” when it comes to these sectors.

The most important legislative changes proposed are:

• Amending the Collective Investment Schemes Act to include a new type of “limited qualified investment funds” with the intention of placing future innovative products on the market in more time and cost-effective way.
• Start recognizing data as an asset by changing company bankruptcy laws. This would allow Swiss courts to handle and properly distribute digital assets when solving legal disputes.
• Widen the Anti-Money Laundering Act to include decentralized exchanges and allow law enforcement to dispose of third-party digital assets.
• Creating new authorization categories to give FINMA discretion to loosen regulations for decentralized securities traders and exchanges based in Switzerland.
• Amending the Financial Institutions Act and the Financial Market Infrastructure Law to make them more flexible towards blockchain initiatives.

Swiss economist Luzius Meisser expressed his belief that this approach to legislation could prove much more effective in a written statement, saying: “This shows once again how the traditional Swiss approach of having principle-based laws that give a lot of discretion to citizens and regulatory agencies are much more innovation-friendly than overly detailed European-style laws.”

Mattia Rattaggi, a spokesman for regulatory matters at the Crypto Valley Association (CVA), commented on the association’s stance on these announcements: “We feel that this approach best represents the principle of technological neutrality and is in line with the position taken by the CVA in the consultation process. This approach ensures maximum consistency within the current legal framework while keeping it principle-based and flexible, while allowing changes to be adopted on a ‘need-to-regulate’ basis.”