Switzerland's regulatory approach to fintech since 2016

The Federal Council's programme of 2016

The starting point of the modern Swiss fintech regime was a decision of the Federal Council on 2 November 2016. The government announced a programme to lower the barriers to market entry for providers of financial technology and opened a consultation on amendments to the Banking Act and to the Banking Ordinance.¹ The background was a concern, widely shared in Zurich and Geneva at the time, that Swiss financial law had been written with incumbent banks in mind. Any company that accepted deposits from more than twenty persons on a commercial basis required a full banking licence, which carried capital, liquidity, organisational and audit requirements that no start-up could meet. The definition of deposit-taking was broad enough to catch crowdfunding platforms and payment service providers that held client money for a few days before passing it on. In practice, a business model involving customer balances could hardly be run in Switzerland without either a bank partner or an expensive restructuring.

The Federal Council's answer came in three steps. Two of them could be implemented by ordinance and therefore quickly. The third required an amendment of the Banking Act and had to pass through Parliament. The sequence reflected a pragmatic judgement: relief for the smallest projects should not wait for the slower legislative process, while a new licence category with its own supervisory requirements needed a statutory basis.

Settlement accounts and the innovation area of 2017

The two ordinance-level measures entered into force on 1 August 2017. The first extended from seven to sixty days the period for which funds held on settlement accounts were exempt from the definition of deposits. The change was aimed chiefly at crowdfunding platforms, which collect money from many investors and hold it while a project is being financed. The second measure created what Swiss practitioners call the innovation area and what the international literature calls a sandbox. The acceptance of public deposits up to a total of CHF 1 million was declared not to be carried out on a commercial basis, so that no banking licence was needed below that threshold. Depositors had to be informed expressly that their money was not covered by the Swiss depositor protection scheme.²

The Swiss sandbox differs from the models adopted in London and Singapore at around the same time. The Financial Conduct Authority in the United Kingdom and the Monetary Authority of Singapore ran sandboxes in which admitted firms operated under individual supervisory arrangements and a degree of regulatory attention. The Swiss innovation area involved no application and no admission decision. It was a statutory exemption available to anyone who stayed below the threshold and complied with the information duty. Its advantage lay in its simplicity, because a founder in Zurich did not need to wait for a supervisory decision before testing a model with real customers. Its limitation lay in the same feature: without supervision, the sandbox offered no regulatory imprimatur that could be shown to investors or banking partners. A further amendment with effect from 1 April 2019 allowed funds accepted in the innovation area to be invested, provided that no interest margin business was conducted.³

Technology neutrality as a guiding principle

The Federal Council's programme of 2016 was followed in January 2018 by the creation of a working group on blockchain and initial coin offerings under the lead of the Federal Department of Finance.⁴ In December 2018 the Federal Council published a report on the legal framework for distributed ledger technology and blockchain in Switzerland, which examined how existing law could accommodate the new technology and where targeted amendments were needed.⁵ The report concluded that Swiss law was in principle suitable for dealing with blockchain-based business models and that a separate law for crypto-assets was unnecessary. It identified specific gaps in civil law, insolvency law and financial market infrastructure law, which became the subject of the DLT Act.

This preference for targeted amendments distinguishes the Swiss path from that of the European Union and places Switzerland closer to the approach of the United Kingdom before its own crypto legislation. The choice has consequences for the practitioner. Swiss crypto law is scattered across the Code of Obligations, the Federal Act on Debt Enforcement and Bankruptcy, the Banking Act, the Financial Institutions Act, the Financial Market Infrastructure Act, the Anti-Money Laundering Act and a series of ordinances and FINMA guidance notes. Anyone advising on a token project in Zurich must therefore work through several statutes in succession, each with its own definitions and its own logic, in order to establish what applies.

Notes

1. Akin Gump Strauss Hauer & Feld, “Switzerland: New FinTech Regulation”, client alert, https://www.akingump.com/en/insights/alerts/switzerland-new-fintech-regulation. The alert dates the Federal Council's announcement of the fintech programme to 2 November 2016 and FINMA's publication of the licence guidelines to 3 December 2018. ↩
2. MoneyToday, “Neue FinTech-Regeln gelten ab 1. August 2017”, https://www.moneytoday.ch/news/neue-fintech-regeln-gelten-ab-1-august-2017/. The article quotes the ordinance text according to which the acceptance of public deposits up to CHF 1 million “gilt nicht mehr als gewerbsmässig” and describes the settlement-account extension as directed particularly at crowdfunding. ↩
3. Akin Gump Strauss Hauer & Feld, “Switzerland: New FinTech Regulation”, https://www.akingump.com/en/insights/alerts/switzerland-new-fintech-regulation (on the amendment of 1 April 2019 and the absence of FINMA supervision within the sandbox). ↩
4. Federal Council, “Blockchain/ICO working group established”, media release of 18 January 2018, https://admin.ch/gov/en/start/documentation/media-releases.msg-id-69539.html. The working group was set up by the State Secretariat for International Finance, part of the Federal Department of Finance, with the involvement of the Federal Office of Justice and FINMA. Its results fed into the report of December 2018. ↩
5. State Secretariat for International Finance (SIF), “DLT / blockchain / tokenisation”, https://www.sif.admin.ch/en/dlt-blockchain-en. The page summarises the Federal Council's report of December 2018 and the subsequent DLT Act. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.