Blockchain technology is known to be beneficial in many aspects of society. In recent times, several governments and private institutions have explored the use of blockchain technology. Recently, the Government of Switzerland has expressed its intentions on the exploration of blockchain technology. However, rather than creating a new set of laws to adapt to the industry, the government will simply adapt its laws to accommodate blockchain technology.
Switzerland hosts blockchain technology in its existing laws
On Friday, the Federal Council in Switzerland published a report on the provision of a legal framework for blockchain technology. The reports state that the financial rules already in place in Switzerland will be applied to new technologies such as blockchain. However, the report made it clear that some amendments must be made before the blockchain technology can be fully adopted and regulated by existing financial laws.
First of all, the council proposed to change the country's security laws. In this way, the legal certainty of cryptocurrencies will be solidified. The highest manager of the Swiss Confederation declared:
"Since the entries in the blockchain are accessible to anyone interested and can create advertisements similar to the ownership of security, it is justifiable that we have attached a similar legal effect to that."
The board also decided to separate the cryptocurrencies from the assets of the insolvent debtors when it comes to bankruptcy proceedings. As the current laws on bankruptcy and debt enforcement in Switzerland do not specifically specify whether digital resources can be segregated or not, the Council has decided that there should be legal certainty for all parties involved. This is why a corresponding change was proposed in the DEBA.
In addition, the agency has proposed that there should be a new category of authorizations for infrastructure providers within the blockchain industry. They also said they would do what they needed to make the necessary changes to the financial infrastructure law in line with the new information. However, the council still has to propose specific changes regarding the central definitions of the terms derivatives and securities within the market regulations. However, these terms are also relevant in the blockchain industry according to the council.
Money-laundering and blockchain technology
In discussing the country's anti-money laundering laws, the Council stated that the current legislation is sufficient to cover all activities related to blockchain and cryptocurrency. The executive continued:
"The common principle of our anti-money laundering law can also apply to cryptocurrencies and related assets.There is no need for a basic revision at this time."
This is not the first move the government has made in the blockchain space. In 2016, the government of Switzerland started working with its federal finance department. At that time, he declared his plans to regulate the FinTech industry. In 2017, the board consulted regulatory changes for the financial sector. This was done in an attempt to account for the innovative fintech including blockchain technology.
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Recently, FINMA, the Financial Market Supervisory Authority in Switzerland, introduced a fintech license that had liberal requirements applicable to cryptocurrency and blockchain companies. These are just some of the moves that have been made to promote this emerging technology in Switzerland. If more countries take time to explore this technology, industry will soon reach for mass adoption.