The Swiss Federal Council believes that the country’s laws could be better adapted for integrating blockchain.
In its report, ‘Legal basis for distributed ledger technology and blockchain in Switzerland,’ the council said that the existing Swiss legal framework was relatively open to blockchain companies, yet more could be done to “improve the innovation-friendly framework conditions.” According to the seven-member body, improvements to legislation could be achieved by “targeted adjustments” focusing on specific branches of the law, such as on insolvency and insurance.
The report said the country should continue being “technology-neutral” in its regulations, “but should also allow exceptions if necessary.” By providing clear and efficient rules, the council said that it could better position itself as a location for companies involved with DLT. Also seen as important were dialogues with industry players.
The council noted several implications of the technology, for which legislative tweaks were recommended accordingly.
Civil law, it said, could benefit by having the transfer of property rights represented through tokens. “The Federal Council is proposing an amendment to securities law to increase legal certainty. The proven principles of securities law should be retained as much as possible,” it said.
Financial market law was said to have “no fundamental issues” that “would require fundamental adjustments” on account of blockchain. Yet amendments were suggested for banking law, financial market infrastructure law, collective investment schemes law, and the insurance sector.
A risk for cryptocurrencies being used for money laundering was recognized, but the council said that much has already been covered in existing AML regulations. “The challenges arising in this connection generally have to be addressed internationally within the context of the work of the Financial Action Task Force,” the Federal Council added.
The council called on the Federal Department of Finance and the Federal Department of Justice and Police to take the report into consideration in coming up with a consultation draft in the first quarter of next year.
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