Save Download Preview Bitcoin cryptocurrency, virtual money, blockchain technology concept

Switzerland ushers in new era as blockchain law takes effect

Switzerland has ushered in a new era for the digital assets industry after the tokenized securities law took effect on February 1. Known as the Blockchain Act, it sets a firm legal basis for digital asset exchange and tokenization while tackling the threat of digital currency money laundering.

The Act was passed in September 2020, with the Swiss legislators striving to keep up with their neighbors Liechtenstein which was among the first to develop digital currency regulations. It will be implemented in two phases this year. The first, which centers on company law reforms, took effect on February 1. Financial market upgrades will follow in August as part of the second phase.

As CoinGeek reported, the law lays out some crucial processes, such as the legal process of seizure of digital assets in bankruptcy. It also outlines the role of digital currency trading platforms and the legal standing of digital securities.

Commenting on the new law, Hans Kuhn stated that he believes it will give Swiss blockchain firms a leg up over other global competitors. Being one of the first major economies with a well-defined digital currency regulatory framework will allow companies to build products with increased assurance.

Kuhn, who is a board member at digital banking platform SEBA added, “With the DLT law coming into force, Switzerland reaffirms itself as one of the most progressive and innovative legal and regulatory jurisdictions around the world that now fully supports the issuance of digital securities on a native blockchain basis.”

Already, leading Swiss companies are rushing to announce new products as the new law takes effect. Crypto Broker AG announced February 1 that it had received a securities house license by the watchdog, FINMA. The license will allow it to broaden the scope of its products and services and work with more regulated parties.

Jan Brzezek, the founder and CEO of the parent company, Crypto Finance Group, remarked:

“Getting the securities house licence for our brokerage is a pivotal moment for us. It means that we will be able to offer our professional – and regulated – services to even more financial institutions, enabling them to enter this new asset class. The licence also recognises our team’s dedication and expertise.”

Sygnum, yet another leading Swiss digital currency startup, also announced that it had partnered with Fine Wine Capital AG for Switzerland’s first tokenized security—fine wines.

Sygnum’s Head of RegTech Gino Wirthensohn commented, “The legal provisions which come into effect today ensure that asset tokenization is now a viable alternative to traditional securitization from a legal point of view.”

See also: CoinGeek Live panel, Digital Currency & Global Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers

YouTube video

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.