A year ago, the Swiss blockchain law came into full force. The country is an international pioneer in this regard. So, one year later, what lessons can we learn?
Distributed ledger technologies such as blockchain have great potential, especially in the financial sector.
It enables encrypted, decentralized storage and transfer of value, enabling an end-to-end value chain for digital assets.
This promises innovative applications and increased efficiency in a fully digital financial industry.
Switzerland is one of the largest financial centers and one of the most advanced countries in the field of fintech.
This provided the right foundation for Switzerland’s early adoption of blockchain technology in the financial sector.
Currently, Switzerland has more than 1,000 companies in the fintech and blockchain space, comprising a wide range of companies, from early-stage start-ups to fully regulated banks with digital-asset-only business models.
The country is also home to industry pioneers such as the Ethereum Foundation, which was founded in Switzerland in 2014.
Among other success factors, Switzerland’s innovation-friendly framework conditions and legal certainty have allowed us to evolve a dynamic blockchain ecosystem while maintaining the integrity and stability of the financial center.
Financial center integrity is a key priority
For Switzerland, the integrity and reputation of financial centers are of utmost importance.
Switzerland amended its anti-money laundering law to explicitly include cryptocurrencies as early as 2015.
Since then, additional changes have been implemented to continuously ensure that the very same rules of cryptocurrency apply to those of traditional currency assets, accounting for the latest developments in the digital asset space. .
It is also important to work together at the international level to combat money laundering and terrorist financing.
As such, Switzerland actively contributes to the Financial Action Task Force (FATF) and fully implements the standards on crypto assets, going beyond where it applies.
In addition, Switzerland is actively working towards the speedy international implementation of FATF standards, avoiding loopholes and havens for illicit business.
Continued Efforts Needed to Ensure Financial Center Stability
Switzerland actively participates in the activities of relevant international bodies such as the Financial Stability Board (FSB).
FSB latest evaluation Digital assets do not yet pose a significant risk to financial stability, but we have found that they may in the future given the rapidly evolving market for digital assets. .
Based on this assessment, the FSB will: Framework This month’s international regulation of digital asset activity will allow national legislators and regulators to take appropriate steps to mitigate risk and ensure stability.
Swiss legal framework provides legal certainty beyond cryptocurrencies
During 2021, the Swiss blockchain law will be fully implemented. The legislative package, unanimously approved by the Swiss parliament, aims to provide legal certainty in an environment of rapidly evolving technology.
Specifically, we will enhance legal certainty for blockchain applications in non-crypto financial areas in three ways.
First, create a clear legal basis for the issuance and transfer of rights such as stocks and bonds on a distributed ledger (such as a blockchain).
Second, it protects bankrupt customers by providing digital asset segregation in the event of bankruptcy.
Finally, we introduce DLT trading facilities as a new endorsement category for multilateral trading of securities issued on distributed ledgers in a regulated environment.
Blockchain law has strengthened Switzerland’s international position as a pioneering place for the development of Fintech as a whole and the digital asset sector.
Not only will this benefit companies that deal with digital assets, but the financial center as a whole could carve out a distinct niche in the future.
The Swiss government, in a continuous and open dialogue with market participants, can optimally take advantage of the opportunities offered by this technology while maintaining financial stability and minimizing the associated risks. We will continue to work on the legal framework.
For more information on Switzerland’s financial centres, visit finance.swiss. website.