The Swiss DLT Act: what it enables
Switzerland does not have a standalone “crypto law”. It did something smarter: it made targeted amendments to about ten existing laws to make room for distributed ledger technology. This is the so-called DLT Act, which entered into force in two stages between 2021 and August 2021, making Swiss law one of the clearest in the world on tokens and blockchain. It introduces neither exemptions nor free zones: it adapts the existing rules so that they apply even when the instrument is a token. Here is what it really enables.
The principle: technological neutrality
The common thread is technological neutrality. The rules apply to the economic activity, not to the instrument you use to carry it out. A banking activity remains banking whether it is conducted at the counter or via blockchain; a security remains a security whether it is paper-based or tokenised. The DLT Act does not create a lighter parallel regime: it clarifies how the rules in force apply to the world of tokens, closing the gaps that used to create uncertainty.
What it enables in concrete terms
The most significant changes are three.
1. The ledger-based security (register token)
The amendment to the Code of Obligations (Art. 973d et seq.) introduces the ledger-based security: a right — corporate, credit-related, contractual — can be validly incorporated into a token and transferred through a distributed ledger, with the same legal effect as a traditional assignment. This requires a registration agreement between the parties and a ledger that guarantees integrity and control by the holders. It is the legal basis that makes it possible to tokenise assets and rights in a binding way, without contractual workarounds.
2. Insolvency protection
The Act clarifies the segregation of crypto-assets held on behalf of clients in the event of the custodian’s bankruptcy. If the assets are held available to the client and individually attributable, they can be separated from the bankruptcy estate and returned, as already happens for other deposited assets. This is a crucial point for professional custody: it reduces the risk that the custodian’s bankruptcy sweeps away the clients’ assets.
3. DLT trading facilities
A new category of authorisation is introduced, the DLT trading facility, which allows the trading of securities based on a distributed ledger and offers, within a single infrastructure, functions that in the traditional world are separated (trading, settlement, custody). It is designed to open access also to operators other than financial intermediaries alone, within defined conditions.
What the DLT Act does not do
It is important to be equally clear about what does not change:
- It does not eliminate authorisations. Regulated activities — deposit-taking, intermediation, management, custody for third parties under certain conditions — remain subject to authorisation or supervision.
- It does not suspend anti-money-laundering rules. Issuing, custody and transfer on behalf of third parties can trigger the AMLA (Anti-Money Laundering Act), with obligations of identification, clarification and monitoring, and affiliation with a self-regulatory organisation or being covered by a supervised entity.
- It does not automatically qualify tokens. Every token must be analysed case by case: payment tokens, utility tokens and asset tokens are treated differently. The legal and economic nature prevails over the label.
Why it matters for those operating
The value of the DLT Act is legal certainty. A project can today know, before starting, whether its token validly incorporates a right, how it is transferred, what happens in the event of the custodian’s bankruptcy, and which infrastructure it can use to trade it. This reduces legal risk and makes Switzerland a credible base for serious operators. But certainty is worth something only if the structure is set up correctly: the very articles that protect those who meet the requirements do not help those who ignore them.
How SIH ONE approaches the topic
SIH ONE handles structuring and advisory: qualification of the token and the activity, verification of the requirements for the ledger-based security, design of the structure and the anti-money-laundering safeguards, identification of the authorisation perimeter. Where the activity requires a FINMA authorisation, an SRO affiliation or custody for third parties, the regulated activities go through authorised partners. The goal is for you to take advantage of the DLT framework knowing exactly where you stand.
This content is informative and does not constitute legal or regulatory advice. The framework evolves: every case must be verified specifically.
Want to understand how the DLT Act applies to your project? Let’s talk: we map the activity and build the correct structure, with the right partners where authorisation is needed.