The Swiss regulatory framework around digital assets is now among the most advanced in the world
Switzerland is becoming one of the first countries in the world to codify digital assets into national law, having implemented the first phase of the so-called ‘blockchain law’ yesterday. Reforms to company law are now in progress and from the start of August, the country will also see upgrades to the financial market infrastructure.
The ‘Blockchain Act’ passed through the House of Representatives last summer without opposition, followed by a wide-ranging set of reforms to financial and corporate law being passed by the Senate in September. Laws on securities trading and company bankruptcy were among those to be updated. President of the Swiss Blockchain Federation, Heinz Tännler, said at the time, “As of next year, Switzerland will have a regulatory framework that is among the most advanced in the world.”
The industry certainly hasn’t been slow to react to the change. Swiss asset management firm, Crypto Finance, announced yesterday that its Crypto Broker subsidiary had been granted a securities house licence by the Swiss financial regulator FINMA. The brokerage traded over $1 billion in assets in 2020 and the licence enables it to begin offering new products and services, such as trading security tokens.
Banks Sygnum and SEBA already received their FINMA licences back in 2019, and also made announcements yesterday. SEBA Bank is issuing its Series B Participation Certificates as tokenised equity securities on the blockchain after raising $22 million in funding last year.
Meanwhile, Sygnum has created the first asset tokens to be issued under the new law. In collaboration with Fine Wine Capital, Sygnum has tokenised a range of premium investable wines on their Desygnate platform. Electric car company BAK Motors also plans to create digital shares through Sygnum.
Bitcoin Suisse, SDX, Taurus and Lykke have all either announced licence applications or are rumoured to be seeking them.
The legislative changes scheduled for August will create a new licence category for distributed ledger technology (DLT) exchanges. This will make possible a network of platforms on which to trade the new digital securities being created, and SDX is planning to launch in the second quarter of this year.
Board member of SEBA Bank, Hans Kuhn, commented, “With the DLT law coming into force today, 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. This marks a major step forward in enabling and securing the innovation expected of security token issuance.”