Switzerland boosts DLT/blockchain framework conditions (Dec 2019)

Foreword: METI Advisory wrote this report for SEBA Bank AG. Abstract: On 27 November 2019 the Swiss Federal Council adopted the dispatch on the framework conditions for DLT/blockchain that aims to increase legal certainty, remove barriers to entry for applications based on DLT/blockchain and reduce the risk of abuse. This step provides Switzerland with a very advanced, fundamental and comprehensive legal framework, achieved by adapting existing laws instead of introducing a specific technology-related law. The dispatch proposes specific amendments to nine federal acts, covering civil securities, insolvency and financial market laws. The Swiss Parliament is expected to examine the proposal for the first time in early 2020. Other noteworthy regulatory developments include the Basel Committee on Banking Supervision (BCBS) anticipating work on the prudential treatment of crypto assets (of obvious relevance to emerging crypto banks and banks dealing with crypto assets), the likelihood that in Germany, banks will be given authorisation to offer the sale and storage of cryptocurrencies (poised to boost cryptofinance in Germany), growing crypto legal certainty in England (demonstrating the regulatory commitment to crypto) and the prospect that in Singapore, cryptocurrency-based derivatives will be listed on the regulated exchange (which would further consolidate the country’s position as a prime cryptofinance hub).