During its meeting on 22 March 2019, the Federal Council initiated the consultation on the adaptation of federal law to developments in distributed ledger technology (DLT). It thereby wants to increase legal certainty, remove hurdles for DLT-based applications and limit risks of misuse. The draft serves to further improve the regulatory framework for DLT in Switzerland, in particular in the financial sector. The consultation will last until the end of June 2019.
In December 2018, the Federal Council adopted a report on the legal framework for blockchain and DLT in the financial sector. It emphasised that it wants to create the best possible framework conditions so that Switzerland can establish itself and evolve as a leading, innovative and sustainable location for fintech and DLT companies. Moreover, it wants to consistently combat abuses and ensure the integrity and good reputation of Switzerland as a financial centre and business location.
Among other things, the report showed that Switzerland's legal framework is already well suited today to dealing with new technologies, including DLT. However, it also pointed out the need for selective action. In the consultation draft which was announced in December 2018 and is now available, the Federal Council proposes the following adjustments in particular:
- In the Swiss Code of Obligations, the possibility of an electronic registration of rights that can guarantee the functions of negotiable securities is to be created. This is intended to increase legal certainty in the transfer of DLT-based assets.
- In the Federal Law on Debt Collection and Bankruptcy, the segregation of cryptobased assets in the event of bankruptcy is to be expressly regulated, also to increase legal certainty.
- In financial market infrastructure law, a new authorisation category for so-called "DLT trading facilities" is to be created. These are intended to be able to offer regulated financial market players and private customers services in the areas of trading, clearing, settlement and custody with DLT-based assets.
- Finally, it should also be possible in future to obtain a licence to operate an organised trading facility as a securities firm. This requires an adaptation of the future Financial Institutions Act.
In the area of combating money laundering, the Federal Council sees a need, as outlined in December 2018, for more precise definitions of current practice. However, these amendments at ordinance level are not part of this consultation draft, rather they are to be integrated into the planned amendment of the Anti-Money Laundering Ordinance as part of the ongoing revision of the Anti-Money Laundering Act.
The Federal Council has also asked for clarification as to whether legislation in the area of the prevention of money laundering and terrorist financing should be adapted with regard to crowddonating and crowdsupporting platforms. At the moment, relatively modest donations are collected via these platforms. In addition, other jurisdictions are currently also refraining from regulating such activities. The Federal Council is therefore of the opinion that it would be disproportionate at present to subject crowddonating and crowdsupporting platforms to the Anti-Money Laundering Act. It will continue to monitor developments and, if necessary, reassess whether such platforms should be subject to the Anti-Money Laundering Act.