The Swiss government seeks the parliament’s approval to amend nine laws relevant to blockchain businesses. Swiss lawmakers do not see any need for a Blockchain Act, but changes to the current legislation are required.
A few days ago, on 27th November 2019, the Swiss Federal Council has issued a legal draft to improve the country’s legal framework governing blockchain technology. The goal is to increase legal certainty, remove regulatory roadblocks for blockchain businesses, and reduce the risk of abuse.
The draft is based on a report issued in December 2018, in which the Federal Council examined the current legal landscape in regards to blockchain and pledged to transform Switzerland into a leading worldwide hub for blockchain innovation and fintech.
No Swiss Blockchain Act, but amendments to the current legal framework
On the contrary to Liechtenstein, Switzerland is not planning to introduce any blockchain-specific regulations. The government believes, the existing legal framework in Switzerland is sufficient to govern new technologies such as blockchain. However, specific laws will need amendments to facilitate the build-up of digital technologies. That’s why the government has proposed several legal changes to current laws already in March 2019.
The proposal issued in March was reworked after the government had received comprehensive feedback. As a next step, the parliament will discuss the government’s draft proposal, which includes changes to nine laws in the areas of civil law and financial market law. The parliament will discuss the proposal in early 2020.
Switzerland and Liechtenstein: different approach, but the same objective
Even though the Swiss government does not want to introduce a Blockchain Act like Liechtenstein did, both countries have similar goals. Just like Liechtenstein, Switzerland acknowledges the potential of blockchain technology and wants to strengthen the domestic industry.
Switzerland’s lawmakers argue legislation should not be tailored to a specific technology, such as blockchain, but instead create a legal basis for the use of digital technology in general. The founders of Liechtenstein’s Blockchain Act had a similar goal in mind: Even though commonly referred to as the “Blockchain Act,” the law was written in a technology-neutral way so that it can facilitate the build-up of digital infrastructure in general, not only blockchain technology.
Regulating technologies in a broader way makes more sense than regulating specifically blockchain technology or individual applications, as we don’t know today what tech we are going to use tomorrow. We cannot create new laws every time a new technology enters the market.
Countries are competing for the best businesses
Whatever way Switzerland chooses to go, the challenges remain the same as in Liechtenstein: How to govern digital technologies and a token economy, how to structure ownership rights and the transfer of such rights, protect users, and regulate digital asset custody?
Creating the right legal framework is paramount for the industry, users, and also governments, who compete for the best businesses. Today, it has become relatively easy to relocate everywhere at low cost and within a relatively short time. The most recent developments in Malta, which had previously been crowed as Blockchain Island, demonstrate how quickly a country can lose its pole position. Although Switzerland and Liechtenstein are neighbors and have much in common, both countries are competing for the best businesses in the industry.
In case you want to read the complete legal draft, here are the links, in German language: