Switzerland Cryptocurrency Regulation

Is Cryptocurrency Legal in Switzerland?

Cryptocurrencies: Legal, accepted as payment in some contexts
Cryptocurrency exchanges: Legal, regulated by SFTA and FINMA

In Switzerland crypto and virtual currencies are classified as assets or property. Exchanges are legal and, depending on the nature of the assets and investor protections, the Switzerland cryptocurrency regulation is remarkably progressive. Virtual currency exchanges and platforms are considered equivalent to financial institutions in Sweden and so must demonstrate compliance with local AML/CTF and consumer protection obligations, although certain Banking Regulations and thresholds are exempted or less onerous. The Swiss Federal Tax Administration (SFTA) considers cryptocurrencies to be assets: they are subject to Swiss wealth, income, and capital gains taxes and must be declared on annual tax returns.

Switzerland Cryptocurrency Regulation – Exchanges

Switzerland cryptocurrency regulation imposes a registration process on cryptocurrency exchanges and a requirement to obtain a license from the Swiss Financial Market Supervisory Authority (FINMA) in order to operate. While cryptocurrency licensing exemptions are available for public deposits of funds up to CHF1 million, exchanges must write and inform their customers that their funds are not subject to protections if the firm is supervised by FINMA.

Cryptocurrency regulations in Switzerland are also in place for ICOs: in 2018, FINMA published a set of guidelines that applied existing financial legislation to offerings in a range of fields, from banking to securities trading and collective investment schemes (depending on their structure). In 2019, Switzerland’s government also approved a motion that directed the Federal Council to adapt existing provisions to include cryptocurrencies. In September 2020, Switzerland’s parliament passed the Blockchain Act, further defining the legalities of exchanging cryptocurrencies and running cryptocurrency exchanges in Swiss Law. The legalities require compliance with local ICO, AML, and CTF requirements as soon as a token can technically be transferred to the blockchain infrastructure.

Future Switzerland Cryptocurrency Regulation

The government has indicated that Switzerland cryptocurrency regulation will continue to work towards an environment that is friendly to cryptocurrencies. In 2016, the town of Zug, a prominent global cryptocurrency hub, introduced Bitcoin as a way of paying city fees, while in January 2018 Swiss Economics Minister Johann Schneider-Ammann stated that he was aiming to make Switzerland “the crypto-nation”. Similarly, the Swiss Secretary for International Finance, Jörg Gasser, has emphasized the need to promote cryptocurrencies while upholding existing financial standards.

Building on those objectives, in late 2020, Switzerland’s Department of Finance began a consultation on new blanket cryptocurrency regulations that would enable it to take advantage of blockchain technology without stifling innovation.