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FinTechs belonging to this category offer financial services using crypto currencies. This category also includes FinTechs utilising blockchain and distributed ledger technologies (DLT) upon which Bitcoin and Ethereum are based, among others. FinTechs develop and do research in this field in order to create new services – e.g. crypto currency exchange markets, wallet providers, NFTs-related services, new payment services, "smart contracts" or new clearing and settling services.
Introduction
Attitude of the country towards financial services using crypto currencies
Switzerland is one of the leading jurisdictions in the fields of DLT and blockchain. In particular in the financial sector, a growing FinTech and blockchain ecosystem has developed in recent years. In 2021, new provisions came into force (“DLT bill”) that will improve the market access of FinTech companies in the field of DLT/blockchain and raise legal certainty as well as move forward Switzerland’s position as a sustainable and innovative location in the DLT and blockchain area.
Legal affairs
Obligations and requirements to provide financial services using crypto currencies described above
According to the ICO guidelines of FINMA, it considers payment tokens (crypto currencies) as tokens which are intended to be used, now or in the future, as a means of payment for acquiring goods or services or as a means of money or value transfer. FINMA announced that it will treat payment tokens (crypto currencies) not as securities. The issuing of payment tokens is not generally associated with claims for repayment and therefore such payment tokens do not fall within the definition of a deposit. Therefore, the issuance of payment tokens does in general not trigger a banking license requirement. However, FinTechs issuing payment tokens may be subject to the AMLA and respective obligations.
FinTechs that provide custody wallets for tokens and manage the private keys of the customers and, hence, have a direct power of disposal over third-party assets entrusted to them as the holder of the keys, provide a payment transaction service according to FINMA. The professional provision of a payment transaction service is governed by the AMLA. According to FINMA, no banking license is required for such FinTechs providing custody wallets, if the virtual currencies are stored separately on the blockchain for each customer and each deposit can be attributed to an individual customer at all times. FinTechs who provide non-custody wallets have neither a legal nor actual power of disposal over the third-party assets and, hence, such FinTechs are not subject to AMLA.
Asset tokens represent assets such as a debt or equity claim on the issuer. In the course of the enactment of the DLT bill, the definition of securities of the capital market laws was expanded to include not only standardised securities, book-entry securities, derivatives and book-entry securities suitable for mass trading – if they are publicly offered for sale in the same structure and denomination or are placed with more than 20 clients, i.e. they have not been created especially for individual counterparties – but also asset tokens (DLT securities), provided that they fulfil the same criteria and function. If asset tokens constitute securities, they fall under the securities regulation. The admission of asset tokens (DLT securities) to trading on a DLT trading facility triggers a prospectus requirement.
The creation and issuance of tokens which qualify as derivative products within the meaning of FinMIA to the public on the primary market is regulated and may trigger a license requirement as a securities firm or as a bank in accordance with the BankA. Underwriting and publicly offering of tokens, that qualify securities of third parties, on the primary m