The Blockchain Act has made it through the House of Representatives and will be implemented early next year
The Parliament of Switzerland recently passed reforms on financial and corporate law to help the growth of the cryptocurrency and blockchain industry. The law reforms, which have been dubbed as the “Blockchain Act”, will come into effect by the year 2021.
Work on these laws appear to have started as early as November 2019, when it was reported that the Swiss Government was looking at passing legal reforms aimed at supporting the emerging industry.
As part of the newly passed law, revisions that cover blockchain technology now apply to statutes on bankruptcy and securities regulations. Furthermore, the Act also offers a legal framework for threading tokenized shares and general cryptocurrency exchange operations.
In addition, the law also puts forward a legal basis for broader asset tokenization. This means that firms are now allowed to list digital versions of their assets, such as art, real estate and other assets on blockchain platforms.
These new laws appear to be well received amongst industry stakeholders located in the country. The President of the Swiss Blockchain Federation, Heinz Tännler, believes these reforms are a good step forward for Switzerland.
“As of next year, Switzerland will have a regulatory framework that is among the most advanced in the world,” he said.
Liechtenstein, a neighboring country, has also chosen to work extensively on blockchain legislation; however, the government has decided to take a different approach by creating new laws rather than amending their current code.
In the last few years, over 900 blockchain companies have chosen to set up in Switzerland, which is now being dubbed as the “Crypto Nation”. The country caters to a wide variety of businesses within the industry, including asset managers, crypto banks, alpine crypto vaults, blockchain companies, digital stock exchanges and digital currency projects.
The legal code provides a measure of security for banks in the country, since prior to this local banks have been wary of businesses within the cryptocurrency and blockchain industry for fears of encountering a fresh wave of money laundering woes.
However, they have also conceded that prolonged caution towards the industry may cause them to miss out on the potential to revolutionise finance. Some banks, such as UBS and Credit Suisse, have recently revealed that they are testing the potential of DLT trading. They are also a part of a consortium behind a digital payment token project that would help settle trades faster.