Federal Council wants to further improve framework conditions for Blockchain/DLT

Distributed ledger and block chain technology is predicted to have considerable potential for innovation and efficiency gains both in the financial sector and in other sectors of the economy. The Federal Council wants to exploit the opportunities offered by digitisation for Switzerland. It wants to create the best possible framework conditions so that Switzerland can establish and develop itself as a leading, innovative and sustainable location for fintech and blockchain companies. It also wants to combat abuses consistently and guarantee the integrity and good reputation of Switzerland as a financial and economic centre.

The report provides an outline of relevant framework conditions, clarifies the need for action and proposes concrete measures. It is based on the work of the "Blockchain/ICO" working group, which the Federal Department of Finance (FDF) set up in January 2018 and which also consulted the fintech and financial sector as part of its work. The analyses show that no fundamental adjustments to the Swiss legal framework are necessary, but that there is still a need for selective adjustments. The Federal Council has instructed the FDF and the Federal Department of Justice and Police (FDJP) to prepare a consultation draft in the first quarter of 2019, with the aim of

• in civil law, to increase legal certainty in the transfer of rights by means of digital registers
• in insolvency law, to further clarify the segregation in bankruptcy of crypto-based assets and to examine the segregation of data that are not assets,
• to develop a new and flexible authorisation framework for block-chain-based financial market infrastructures in financial market law,
• in banking law, to align the provisions of banking insolvency law with the adjustments in general insolvency law, and
• to anchor more explicitly in money laundering law the current practice of making decentralised trading platforms subject to the Money Laundering Act.

On 7 December 2018, the Federal Council also took note of a report by the Interdepartmental Coordination Group for Combating Money Laundering and Terrorist Financing (KGGT) on "Money Laundering and Terrorist Financing Risks of Crypto-Assets and Crowdfunding". The analysis shows that crypto-based assets pose a threat in the area of money laundering and terrorist financing. However, due to the small number of cases, the real risk in Switzerland cannot be conclusively assessed. However, Switzerland has a comprehensive regulatory framework in place, which is why further improvements must be addressed by means of internationally coordinated measures. The Federal Council has also instructed the FDF to examine whether the money laundering law should be adapted with regard to certain forms of crowdfunding.