Switzerland will not enact Blockchain Law for Bitcoin & Cryptos

On December 14th, the Swiss Federal Council published its report “Legal Foundations for Distributed Ledger Technology and Blockchain in Switzerland”. The report deals with the future regulation of Bitcoin and Blockchain technology in the country.

The Swiss government does not want to enact any additional blockchain legislation. The Federal Council acknowledges in its report that the technology used by cryptocurrencies such as Bitcoin and Ethereum holds great potential for the financial sector.

“Distributed Ledger Technology (DLT) and Blockchain technologies are among the most notable and potentially promising developments in digitization. These developments, both in the financial sector and in other sectors of the economy, are expected to generate significant potential for innovation and efficiency, albeit not yet conclusively assessable. Switzerland is one of the leading locations in the fields of DLT and Blockchain today. In the financial sector, a growing FinTech and Blockchain ecosystem has developed in Switzerland in recent years. “

No further legislation on Blockchain

In order to create the best conditions, the Alpine nation does not want to adopt a new blockchain law. However, the government wants to adapt their laws to technical innovations in a flexible manner. Moreover, the Swiss Federal Council considers some adjustments to the current legislation. Therefore, the following areas of the financial market law will be adapted by early next year:

  • Banking law
  • Financial Market Infrastructure Law (New Authorization Category for Infrastructure Providers in Blockchain/DLT)
  • Collective Investment Schemes: Consultation proposal to amend the Collective Investment Schemes Act to speed up the approval of new products.

Money Laundering

In the future, the Swiss government wants to pay more attention to matters of money laundering and terrorist financing. However, the Swiss Federal Council recognizes that they cannot assess the actual trade requirements at this point:

“The risk analysis prepared by the 2018 Interdepartmental Coordination Group on Combating Money Laundering and Terrorist Financing (KGGT) shows that there is a risk of misuse of crypto-based assets for money laundering and terrorist financing due to the identified vulnerability in Switzerland. However, this identified vulnerability affects all countries. The analysis also shows that in Switzerland, the actual risk cannot be determined precisely, due to the small number of cases. “

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