Switzerland Explores Separate Regulations for Blockchains and ICOs

Sep 07, 2018 at 23:52

Switzerland is consulting experts and industry stakeholders if carved out regulations are needed for blockchain and initial coin offerings (ICOs).

In a statement posted on the Federal Council’s website (https://www.admin.ch/gov/en/start/documentation/media-releases.msg-id-72001.html), the State Secretariat for International Financial Matters (SIF) said a consultation was launched to determine whether to form a sandbox separately for blockchain and ICOs.

A sandbox refers to “a regulatory carve-out that allows testing of novel business models within defined thresholds.”

The consultation is spearheaded by the blockchain/ICO working group, which was formed at the start of 2018 by SIF together with the Federal Office of Justice (FOJ) and the Swiss Financial Market Supervisory Authority (FINMA).

The working group was tasked to review the legal framework for financial sector-specific applications of blockchain technology and will point out concrete need for action.

SIF said the working group has been working intensively with civil and financial market law for the development of regulations for blockchain technology.

“The focus here is not only on so-called initial coin offerings but on all applications of distributed ledger technology in the financial sector,” it said.

“In particular, a potential need for action was identified in the civil law transfer of tokens, their treatment under insolvency law and the creation of new opportunities in the area of financial market infrastructures,” it added.

Now, the working group is seeking comments and recommendations until September 20.

“The working group is directly inviting financial and fintech associations to participate in the consultation,” SIF said. “This consultation provides an opportunity for the financial sector as a whole and all interested parties to comment on the potential need for action.”

By the end of the year, the working group will report its findings to the Federal Council, which will decide on the introduction of any legal amendments based on recommendations.