Blockchain and initial coin offerings: Switzerland as an attractive location for digital innovations

Digital Innovations

Switzerland’s Federal Department of Finance (FDF) explains the country’s position as an attractive location for digital innovations, focussing on blockchain and initial coin offerings (ICOs)

A blockchain/ICO working group in Switzerland is investigating the legal framework for the provision of corresponding services and pointing out any need for action. The focus is on financial sector-specific applications using blockchain technology.

As a small and open economy, Switzerland is dependent on continuous innovation if it wants to maintain its appeal as a business location in the longer term. Blockchain technology (1) has great innovation potential and applications based on it can be used in many economic sectors. Aside from the financial sector, examples include energy trading, supply chain management and land register management. Switzerland has excellent conditions for playing a leading role internationally in this area. These include the strong financial centre, leading universities, an existing Fintech and blockchain ecosystem and stable framework conditions. Consequently, Switzerland is an attractive location for digital innovations already today.

However, blockchain technology also raises questions about risks and the legal framework. Due to the rapid developments in recent times – including those in Switzerland, for example, around initial coin offerings (ICOs) (2) – the clarification of such issues has become very important and urgent, especially in the financial sector. The industry has a considerable and understandable need for a greater legal certainty: it wants to know which activities are possible under which conditions. However, any risks must also be addressed. The integrity of the Swiss financial centre may not be adversely affected by the new technology.

In the short term, the Swiss Financial Market Supervisory Authority (FINMA) is tasked with applying the existing financial market law considering technological developments. In February 2018, for example, it published guidelines on the practical design of ICOs. In addition, it conducts strict enforcement in the case of fraudulent projects.

However, blockchain technology also gives rise to fundamental legal issues concerning both financial market law and general pieces of legislation (Code of Obligations, Swiss Civil Code, etc.). In the longer term, the legislator or regulator will be responsible for making legal adjustments, if necessary, to ensure a competitive framework and technology-neutral regulation, as well as to address any risks.

The FDF has established a working group (together with the FOJ and FINMA, among others) for this reason. It is to report to the Federal Council by the end of 2018 and point out any requirements for action. The sector should be consulted and involved in this process. The aims of this work are to increase legal certainty for companies in the blockchain area, maintain the integrity of the financial centre and ensure technology-neutral regulation.



(1) Blockchain is a decentralised register in which all types of transactions are processed in a network of distributed computers.

(2) With this special type of crowdfunding, bitcoins, ether tokens or other cryptocurrencies are collected under the term “ICO” (initial coin offering) for project financing and new, project-specific tokens are issued. These tokens are designed differently. Some contain only rights and values on

the blockchain (e.g. bitcoin), others represent values (e.g. gold) or rights (e.g. shares) in the real world. Depending on distribution and acceptance, all these tokens can also have characteristics of a currency.


Federal Department of Finance (FDF)

Tel: +41 (0)58 469 79 47


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