Switzerland To Amend Existing Financial Laws To Regulate Crypto And Blockchain Technologies

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December 17, 2018 8:39 PM

The Federal Council commissioned further analyses by the Federal Department of Finance and the Federal Department of Justice and Police to improve the country’s financial landscape.

Switzerland’s Federal Council, a seven-member executive council that makes up part of the country’s government, on December 14 outlined a series of planned changes to the Swiss legal framework and its ability to “deal with new technologies including blockchain” and, more generally, distributed ledger technology (DLT). The Council wants to see a set of adjustments to existing financial laws, including the monitoring and review of the potential risk of money laundering and terror financing through digital assets.

According to the press release, a blockchain/ICO working group set up by the Swiss Federal Department of Finance (FDF) analyzed the Swiss FinTech and finance sector and found no need for fundamental adjustments to current financial laws. The Federal Council, however, asked that the FDF and the Federal Department of Justice and Police (FDJP) continue to work toward better legal clarity for holders of digital registers.

More specifically, in a report published by the Federal Council last week, the regulators wrote that they hoped to see proposed changes to the country’s Financial Market Infrastructures Act and the Financial Institutions Act that will “[create] more flexibility to better meet the needs of blockchain/DLT applications.”

Regarding the country’s anti-money laundering (AML) laws, the release notes that the Interdepartmental Coordination Group on Combating Money Laundering and Terrorist Financing found a low number of Swiss cases in which crypto-based assets posed a threat to money laundering and terrorist financing. Again, the Federal Council mandated the FDF to continue to improve the country’s AML legislation, and examine whether it should be “adjusted in relation to certain forms of crowdfunding.”

Early in December, Switzerland’s Financial Market Supervisory Authority (FINMA), the country’s financial regulator, announced a series of new requirements for blockchain- and cryptocurrency-based firms applying for a FinTech license that will go into effect on January 1, 2019. The new requirements will make it easier and quicker for companies to receive FinTech licenses.

More recently, Gazprombank (Switzerland) Ltd. partnered with FinTech start up Avaloq and crypto firm METACO to begin offering cryptocurrency-linked banking services in 2019.

Nicholas Ruggieri studied English with an emphasis in creative writing at the University of Nevada, Reno. When he’s not quoting Vines at anyone who’s willing to listen, you’ll find him listening to too many podcasts, reading too many books, and crocheting too many sweaters for his dogs, RT and Peterman.

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