Switzerland further improves framework conditions for DLT/blockchain companiesOther noteworthy developments Conclusion
Wednesday, 11 December, 2019
The Digital Regulator
Switzerland Boosts DLT/Blockchain Framework Conditions
On 27 November 2019 the Swiss Federal Council adopted the dispatch on the framework conditions for DLT/blockchain that aims to increase legal certainty, remove barriers to entry for applications based on DLT/blockchain and reduce the risk of abuse.
This step provides Switzerland with a very advanced, fundamental and comprehensive legal framework, achieved by adapting existing laws instead of introducing a specific technology-related law. The dispatch proposes specific amendments to nine federal acts, covering civil securities, insolvency and financial market laws. The Swiss Parliament is expected to examine the proposal for the first time in early 2020.
Other noteworthy regulatory developments include the Basel Committee on Banking Supervision (BCBS) anticipating work on the prudential treatment of crypto assets (of obvious relevance to emerging crypto banks and banks dealing with crypto assets), the likelihood that in Germany, banks will be given authorisation to offer the sale and storage of cryptocurrencies (poised to boost cryptofinance in Germany), growing crypto legal certainty in England (demonstrating the regulatory commitment to crypto) and the prospect that in Singapore, cryptocurrency-based derivatives will be listed on the regulated exchange (which would further consolidate the country’s position as a prime cryptofinance hub).
Switzerland further improves framework conditions for DLT/blockchain companies
Other noteworthy developments
The BCBS is working on the prudential treatment of crypto assets
Germany soon to allow its banks to offer the sale and storage of cryptocurrencies
UK increases crypto legal certainty
Singapore may allow cryptocurrency-based derivatives on regulated exchanges
The Financial Action Task Force (FATF) has initiated a consultation on digital identity
The key digital regulatory development in the past few weeks has clearly been the issuance of the DLT/blockchain dispatch by the Swiss Federal Council. The parliamentary debate will take place in 2020. The industry wishes a swift adoption and promulgation of the draft bill. The rules provide Switzerland with a very advanced, fundamental and comprehensive legal framework in the area of DLT/blockchain applications. The approach followed is strictly technologically neutral, pragmatic and flexible. Regulatory developments in nearby countries such as Germany and the UK, in other countries (such as Singapore) and by international regulators such as the BCBS and FATF shows continuous strong momentum towards the development of a cryptofinance and DLT/blockchain economy while at the same time sharpening the difference between a handful of leading countries and the rest of the world.
1We already wrote on the dispatch in the preceding issues of The Digital Regulator. ↵
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