Switzerland’s Tokenized Securities Law Ushers In New Chapter for Digital Assets

Switzerland now lets tokenized securities trade on a blockchain with the same legal standing as traditional assets. The new law went into effect Monday.

Swiss lawmakers decided not to create a completely new regime but adapted legislation to graft specific features of distributed ledger technology (DLT) onto the existing legal framework. The DLT amendments recognize tokenized securities as a new class of asset, whose legal ownership rights are automatically transferred via the blockchain to each new investor.

“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,” said Alexander Vogel, a partner at Swiss law firm Meyerlustenberger Lachenal (MLL). “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 law change further cements Switzerland as one of the most advanced jurisdictions in the world for crypto (only Singapore is at a similar level). That said, it’s not going to be a free-for-all: Obtaining the necessary license from Swiss regulators takes time and effort.

Meanwhile, SEBA is issuing its Series B equity shares as Ethereum ERC-20 tokens. The move will allow for “seamless connectivity for trading and liquidity on future internationally recognized digital liquidity venues,” the firm said in a press statement.

Speaking about the new legal wrapper for tokenized assets, Matthew Alexander, head of digital corporate finance and asset tokenization at SEBA Bank, said:

“It’s a genuine blockchain-based digital twin of a traditional security. Switzerland’s strategy is to provide a bridge into this new digital economy and the transition from traditional fiat ways of banking and security assurance.”

Alexander said any issuer in Switzerland could take advantage of the new laws. That includes…

Read More