(
CoinDesk) Switzerland’s Federal Council has published a report stating that,
for the time being, it will not create legislation relating specifically
to
bitcoin or other digital currencies.
The
government report
claims the economic importance of these currencies is currently “fairly
insignificant” and the council doesn’t expect this to change in the
near future.
This report has been created following the submission
of postulates by National Councillors Jean-Christophe Schwaab and
Thomas Weibel last year, which asked the Federal Council to
examine the risks and opportunities associated with bitcoin.
No ‘legal vacuum’
A
point the government is keen to stress in the report is that virtual
currencies are not in a “legal vacuum”, meaning that existing laws apply
to activities associated with these currencies. It states:
“Contracts
with virtual currencies are enforceable in principle and penalties can
be imposed for criminal offences associated with virtual currencies.
Certain business models based on virtual currencies are subject to
financial market laws and need to be subjected to financial market
supervision.
Professional trade in virtual currencies and the
operation of trading platforms in Switzerland generally come under the
scope of the Anti-Money Laundering Act. This includes compliance with
the obligation to verify the identity of the contracting party and
establish the identity of the beneficial owner.”
Some
of the laws that apply to certain uses of digital currency include the
Swiss Code of Obligations, the Federal Act on Combating Money Laundering
and the Financing of Terrorism in the Financial Sector, plus the
Federal Act on Banks and Savings Banks.
Legal certainty
Schwaab
told CoinDesk he was pleased the report had clarified the legal status
of bitcoin: “The report ensures legal certainty. That’s the most
important topic at this point. Now, people who trade bitcoin can know
which financial sector regulation applies or not.”
He went on to say he thinks the report underestimates the economic potential of bitcoin. He said:
“The more I learn about bitcoin, the less I remain sceptical about it!”
“That’s
a big mistake for a country like Switzerland with a strong financial
sector. I hope the banking sector will be cleverer than the Government
on that point, but I’m pessimistic.”
Schwaab even went as far as to suggest he is personally becoming increasingly bullish about digital currency.
“In
the last months, my personal views about bitcoin have evolved: the more
I learn about bitcoin, the less I remain sceptical about it!”
Alexis
Roussel, CEO of Swiss based cryptocurrency broker SBEX, said the report
represented good news for the Swiss bitcoin ecosystem.
He was particularly interested in the parts of the report that are relevant to his company’s plans to deploy a
bitcoin ATM network within Switzerland.
“Managing
an ATM would be considered directly as money transmitting service, with
tighter rules. This is starting to shape how bitcoins ATM will work,”
Roussel said.
He explained it means ATM operators would always
need to be licensed, unless they can ensure the user is in control of
the private key of the bitcoin wallet they are sending to.
“This
is imposing high standards in the bitcoin financial world, but this will
be beneficial for consumers in the end,” he added.
The risks
The
report gives examples of the risks associated with bitcoin, stating
that, while there is no risk of it damaging the country’s existing
financial sector, consumers are vulnerable to volatility and security
issues.
It concludes by advising consumer protection organisations within the country to urge people to use caution when using bitcoin.
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