For many years, Switzerland has rapidly embraced both blockchain technology and cryptocurrencies, hosting a large number of companies in and around Zurich, for example. As of Monday this week, a new era of blockchain finance is ushered in across Switzerland.

This week is being referred to more commonly as the first phase of a series of blockchain laws that cover company reforms. Switzerland has been steadily working its way to a more competitive framework for cryptocurrencies and blockchain. For example, in September 2020, the country's parliament passed a wide-sweeping regulatory framework for digital assets.

So, why is this new law so important? It effectively places digital assets on a similar legal standing to conventional assets. What makes it so important is that Swiss lawmakers decided to put together adapted legislation to create a more bespoke legal structure for Distributed Ledger Technology, which could be added to Switzerland's legal framework.

Alexander Vogel, a Partner at Meyerlustenberger Lachenal (MLL), a Swiss legal firm, explained that these new rights would provide far greater clarity for digital assets and blockchain-focussed companies. Vogel said,

“Previously, you had uncertificated rights there that had to be assigned, and a lot of smart people were looking at how that could be done on-chain.”

“With these new registered rights, it's clear that you have legal certainty. If they are properly transferred on a blockchain, the new owner who holds them in his or her wallet is definitely the owner of these rights.”

The new blockchain law allows Switzerland to take a strong position as an emerging digital economy. Providing this legal parity also demonstrates that the country's government has put a considerable amount of focus on promoting digital innovation.

While this has placed Switzerland among a select few countries to take embrace digital assets, the race to develop and host this new generation of financial entities and infrastructures is still one made up of contenders that are neck-and-neck.

Even while this race is still on, the passage of new digital assets/securities legislation was quickly followed by statements from three major financial institutions. These being SEBA, Sygnum Banks, and Crypto Finance, all having made public statements on February 1. For example, Crypto Finance was recently awarded a securities house license by FINMA, a Swiss-based financial regulator, for its cryptocurrency brokerage service. Having handled over 1 billion CHF over 2020 in trades, it has now been given legal permission to offer investors newfound access to digital securities, such as company shares, tokenized estate, and collectibles.

With the conclusion of phase one this week, phase two of the Swiss blockchain law will include a number of massive upgrades to the country's already existing financial market infrastructure. In doing this, the Swiss government will provide a firm legal grounding for trading crypto-based securities, among other crypto exchange operations.

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