Switzerland is regarded as a pioneer and blockchain hub in the heart of Europe and has already been able to attract renowned figures in the crypto industry such as the Ethereum foundation. Nevertheless, in the opinion of the Swiss Confederation, there are still legal loopholes that need to be closed in order to consolidate and further expand the leading role in the blockchain / distributed ledger sector.
The consortium had already submitted a draft to the Federal Council in March 2019 to adapt federal law to developments in the technology of distributed electronic registers. This initial proposal was received positively, so that the laws are to be adapted on this basis.
The Federal Council would like to further improve the conditions so that Switzerland can effectively exploit the opportunities offered by digitization. However, the Swiss legislator does not intend to introduce a new law in its own right, but rather to structure the bill as a jacket decree in order to make targeted adjustments in the following areas:
– Civil law, to increase legal certainty in the transfer of rights by means of manipulation-resistant electronic registers and to clarify the interfaces with book-entry securities law,
– in insolvency law to further clarify the segregation in the bankruptcy of crypto-based assets and to allow access to non-asset based data,
– in financial market law, to provide a new and flexible permissionless infrastructure for block-chain-based financial market infrastructures, and
– in banking law to align the bank insolvency law provisions with the adjustments in general insolvency law.
In order to find a consensus in the field of distributed electronic registers, the report mentions Bitcoin and the Ethereum blockchain as already prominent projects. However, there are also newer projects with excellent performance and higher potential, like Cardano:
Protocols based on proof-of-stake should be mentioned here, where the influence of the participants in decentralized voting is weighted according to their shares in the tokens of the underlying DLT system. Promising examples are the Cardano-Blockchain or Algorand.
However, in addition to the publicly available DLT systems, the proposal also lists permitted DLT systems that could be used as a possible option. These include Corda as well as Hyperledger Fabric. Within permissioned DLT systems, only certain actors have access to the network and can send, receive and confirm transactions.
The respective register must be able to provide information about the securitized right like a security. The exact content of the securitized right, such as the amount of the participation, the amount of the claim or the maturity date, must be clearly and transparently visible so that it can be traded without obstacles. The exact clauses attached to each of these can be found in the draft.
As Charles Hoskinson announced yesterday, Cardano plans to develop a new code with Gerolamo, which is “blockchain-agnostic”. With this new project, Cardano wants to enter into direct competition with IBM, who clearly dominate the market with Fabric. The blockchains Cardano and Atala are interoperable, so according to Hoskinson many companies could switch to Cardano’s permissionless infrastructure in the future.
Cardano has already entered into a big partnership with the country of Georgia that Cardano brings at least 50,000 new users per year and has great potential to grow to several million. Gerolamo could make a strong contribution to the further adaptation of Cardano.
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