Switzerland’s Federal Assembly has recently supported a vote in favor of establishing cryptocurrency on an equal legal footing with traditional assets. However, some questions have been raised over whether this proposal actually mitigates any risks.
The cryptocurrency regulation motion passed 99 to 83
Specifically, the motion passed the lower house of Switzerland’s Federal Assembly, the National Council. A majority of the council’s members came out in support of the bill, which intends to extend existing legislation from both judicial and administrative authorities to cover and apply to cryptocurrencies.
Moreover, 99 members of Switzerland’s National Council voted in favor of the motion, which was put forward by Giovanni Merlini, a liberal public representative. Furthermore, 83 members voted against the bill, whilst 10 of the members abstained from voting altogether.
This means that the proposed regulations change can move on to be considered by the Federal Assembly’s upper house, the Council of States. If the motion will be approved by that house as well, it means that it will be well on the way to become a real piece of legislation.
Nevertheless, Merlini has argued that the main reasoning behind this recent push to regulate cryptocurrencies is in order to prevent money laundering. Merlini went on to make his case to Switzerland’s Federal Assembly:
”Cryptocurrencies could be issued to anyone with a decentralized, cryptographic-based peer-to-peer data network. A large part of the cryptocurrencies is completely anonymous, which favored extortion and money laundering.”
The proposal has received criticism in Switzerland
However, it should be pointed out that this view is far from entirely accepted. In fact, even Europol’s Internet Organized Crime Threat Assessment from late 2018 ceded that this was not the case, arguing that traditional banks are still a far greater threat.
”The use of cryptocurrencies by terrorist groups has only involved low-level transactions — their main funding still stems from conventional banking and money remittance services.”
Moreover, this proposal is somewhat contentious, as it follows a series of cryptocurrency-friendly pieces of legislation passed in the Swiss confederation. At the moment, Switzerland has a fairy lax regulatory burden for cryptocurrencies, classifying them as assets.
Last December, however, Switzerland’s finance minister, Ueli Maurer, stated that the country would seek to adapt existing regulations to fit the needs of the cryptocurrency industry, rather than develop entirely new regulations.
It should also be noted that the motion has received some criticism in Switzerland. As such, it has been lambasted for failing to make clear how risk-mitigating measures should be taken.
Furthermore, it has been reported that doubts have additionally been revised regarding whether cryptocurrency trading platforms ”should be equated with the financial intermediaries and subjected to Switzerland’s Financial Market Supervisory Authority (FINMA).
Consequently, it will be interesting to follow this motion as it reaches Switzerland’s Council of States and is voted upon again.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.