Webinar with Pēteris Zilgalvis and Michael Manz on Regulatory Perspectives for DLT
It was a timely summit of sorts. As of February 1, the first part of the new Swiss DLT regulation will come into force. This development will make Switzerland one of the first countries in the world to have forward-looking DLT legislation. For this reason, the Swiss Blockchain Federation, together with Bitcoin Suisse, organised the webinar “Regulatory Perspectives for DLT in the EU and Switzerland”, attended by over 140 people.
The great interest was due to the two keynote speakers, Pēteris Zilgalvis, Head of Unit, Digital Innovation and Blockchain of the European Commission, and Ambassador Michael Manz, State Secretariat for International Finance SIF.
Heinz Tännler, President of the Swiss Blockchain Federation and member of the government of the Canton of Zug, made some welcoming remarks. He reminded the audience that Switzerland, with the new regulation on Distributed Ledger Technology (DL) Switzerland, becomes one of the first countries worldwide to have forward-looking legislation with clear framework conditions in place. With recent developments in the EU and Switzerland, the landscape for blockchain and DLT-based business is opening up more than ever.
The EU is also pursuing this goal. Pēteris Zigavis pointed out the various initiatives, such as the EU Blockchain Observatory and Forum, an online and offline community, and a 700 million euro fund that invests in AI and blockchain projects and startups. The EU summarises its support for new technologies, namely DLT/Blockchains under the three keywords « exploring, connecting, supporting ».
Four principles guide EU regulation:
- Regulation: full harmonisation,
- Balance: consumer protection and market integrity needs with the promotion of innovation
- EU Passport Principle: «one-stop-shop» principle for a single framework across EU
- Regulatory requirements are proportionate to type of crypto assets & risks to consumers, investors or market integrity. In this regard, there is a lighter regime foreseen for utility & payment tokens and a stricter for stablecoins and significant stable coins.
Currently, the EU discusses the following Crypto Asset Regulation:
- Regulation on Markets in Crypto Assets (MiCA): creating a pan-European regulatory regime for crypto-assets and related services
- The pilot regime for market infrastructures based on DLT, creating a safe space for testing innovative DLT-based financial market infrastructures in the EU.
Michael Manz from SIF reminded the audience that Switzerland does not pursue an industrial policy, but always remains technology-neutral. Ultimately, the market, investors and consumers should decide which technology will prevail and which will not. It is not a task for the state of Switzerland. Given this starting point, it is also why Switzerland does not have its blockchain or DLT law but has made adjustments to 10 existing bills. In doing so, the federal administration followed five principles:
- Openess & dialogue
- Bottom-up approach,
- Specific adjustments,
- Technology neutrality,
- Legal certainty, prevention of abuse
In discussion with Luzius Meisser, Member of the Expert Council of Swiss Blockchain Federation, Nathan Kaiser, General Counsel SIX Digital Exchange, and Mauro Casellini, CEO Bitcoin Suisse (Liechtenstein), it became clear that legal certainty is a significant advantage. In this respect, Switzerland is excellently positioned, as is the EU with the Regulation on Markets in Crypto Assets (MiCA). Investors are looking for security, significantly when they invest in entirely new technologies. In this respect, the EU and Switzerland are ahead. After the USA left Europe behind and took a leading position with the internet in the 1990s and 2000s, even though the World Wide Web had been developed at Cern in Switzerland and Europe 30 years ago, DLT and blockchain offer a new, vast opportunity. It seems to be the case here, too, in contrast to the USA, that privacy and data protection have a different, higher priority, and DLT and blockchain have massive potential in this respect.