On 7 December 2018, the Federal Council adopted a report on the legal framework for block chain and distributed ledger technology (DLT) in the financial sector.
According to a report of the Federal Council "Legal basis for Distributed Ledger technology and block chain in Switzerland" of December 7, 2018, Distributed Ledger technology (DLT) and block chain technologies are among the most remarkable and potentially promising developments in digitization.
In this area, the Federal Council wants to further improve the conditions and create the best possible framework conditions so that Switzerland can establish and develop itself as a leading, innovative and sustainable location for fintech and blockchain companies.
The Federal Council's report provides an interpretation of the relevant legal framework and sets out the need for action, and the report is based on the following principles:
- Politics should ensure optimal, innovation-friendly framework conditions, while market and societal preferences should decide which technologies will prevail;
- Switzerland should not fundamentally call into question its proven and balanced legal framework, but should make rapid targeted adjustments where necessary, where there are gaps or obstacles with regard to DLT/block chain applications;
- Switzerland should continue to pursue a principle-based and technology-neutral legislative and regulatory approach, but should also allow exceptions where necessary; in doing so, the rules should be made as neutral as possible in terms of competition
- Switzerland should position itself as an attractive location for DLT/blockchain companies through legal certainty, efficient regulation and a good reputation, whereby the use of innovative technologies for fraudulent or abusive behaviour or for circumventing the regulatory framework will not be tolerated; and
- the Swiss authorities should be open to new technologies and innovation such as Blockchain and DLT, among others, and maintain a regular dialogue with the industry.
The Federal Council's report is based on the analyses of the "Blockchain / ICO" working group set up by the Federal Department of Finance (FDF) in January 2018.
The media release of 14 December 2018, the Federal Council's report and the report of the Coordination Group for Combating Money Laundering and Terrorist Financing on "Money Laundering and Terrorist Financing Risks of Crypto Assets and Crowdfunding" are available here.
