The Swiss DLT Act: A Complete Analysis of the World's Leading DLT Legislation

On 1 February 2021, Switzerland became the first country in the world to bring distributed ledger technology fully within its mainstream statutory framework. The Federal Act on Adaptation of Federal Law to DLT Developments — the DLT Act — did not create a separate regulatory regime for blockchain. Instead, it reached into eight existing federal statutes and amended each one to ensure that DLT-based assets, DLT-based transfers, and DLT-based market infrastructure could operate with full legal certainty under Swiss law. The result is legislation with no precedent elsewhere in the world: a permanent, comprehensive, technology-neutral statutory framework that transformed Switzerland into the world’s leading jurisdiction for institutional DLT activity.

The Legislative Process: From Federal Council Report to Statute

The Swiss DLT Act’s origins lie in a 2018 Federal Council report that took an unusually honest look at the state of Swiss law as applied to blockchain. That report — “Legal framework for distributed ledger technology and blockchain in Switzerland” — identified specific gaps where Swiss private law, securities law, insolvency law, and financial market infrastructure law failed to provide legal certainty for DLT-based activities.

The diagnosis was precise. Swiss law recognised securities in dematerialised form only through the Federal Intermediated Securities Act, which relied on a centralised securities depository (SIX SIS AG) as the anchor for legal title. A blockchain-based register had no place in that architecture. Swiss insolvency law did not clearly segregate crypto assets held in custody from the custodian’s own estate. The Financial Market Infrastructure Act contained no category for an exchange that combined both trading and settlement functions on a single blockchain platform.

In September 2019, the Federal Council issued a consultation draft of the DLT Act, accompanied by a detailed Botschaft — the official Federal Council message explaining the legislative intent behind each proposed amendment. Parliamentary deliberation followed through 2020. The National Council and Council of States passed the DLT Act in September 2020. Entry into force was phased: the core DLT securities provisions and the insolvency reforms took effect on 1 February 2021; the DLT trading facility provisions followed in August 2021 to allow time for FINMA to prepare the necessary implementing regulations.

The Architecture: Eight Statutes, Precisely Amended

The DLT Act’s drafters made a conscious decision not to create a stand-alone blockchain law. Such a law would have required constant amendment as technology evolved, and it would have sat awkwardly alongside the existing statutory framework that governed the same underlying activities. Instead, the Act made targeted, surgical amendments to eight federal statutes, inserting DLT provisions where they naturally belonged within the existing legal architecture.

The Code of Obligations (OR) received the DLT Act’s most fundamental innovation: a new type of right-bearing instrument. Article 973d CO introduces the concept of a Registerwertrecht — a right that is incorporated in a distributed electronic register in such a way that the registered holder can exercise it independently. This is the Swiss legal foundation for a DLT security: an asset that has no paper form, no centralised register, and no intermediary required for its creation or transfer. The Code of Obligations simultaneously establishes the technical requirements such a register must meet and the legal consequences that flow from registration.

The Federal Intermediated Securities Act (BEG) was amended to bring DLT securities within the scope of client asset protection. Holders of DLT securities registered through an intermediary now have the same statutory protections as holders of traditional book-entry securities — segregation from the intermediary’s own assets, protection against use of client assets by the intermediary, and priority in the intermediary’s insolvency.

The Banking Act (BankG) received a critical insolvency reform. Prior to the DLT Act, the legal treatment of crypto assets in a bankrupt custodian’s estate was uncertain. The amended Banking Act expressly provides that crypto assets — including DLT securities and other tokens — held in custody for clients must be segregated from the custodian’s own estate and cannot be claimed by the custodian’s creditors. This provision eliminates one of the most significant institutional hesitations about crypto custody: the fear that client assets would be pooled with the bankrupt estate.

The Debt Enforcement and Bankruptcy Act (SchKG) was amended to address the treatment of DLT assets in enforcement proceedings — ensuring that the distinctive features of blockchain-based assets (private key control, on-chain transfer requirements) are accommodated within Swiss enforcement procedures.

The Financial Market Infrastructure Act (FinfraG) received the DLT Act’s most commercially significant innovation: the DLT trading facility licence. This new regulatory category — distinct from a traditional stock exchange and distinct from a multilateral trading facility — permits an operator to combine the functions of trading and settlement on a single DLT-based platform. Traditional financial market infrastructure requires strict functional separation: the exchange matches trades, and the central securities depository (CSD) settles them, typically on a T+2 basis. A DLT trading facility can perform both functions simultaneously, with settlement occurring at the point of trade execution through blockchain transaction — collapsing the settlement cycle from days to seconds.

The Financial Services Act (FIDLEG), the Financial Institutions Act (FINIG), and the Collective Investment Schemes Act (KAG) each received amendments ensuring that DLT securities and DLT-related financial services fit within the existing licensing and conduct-of-business framework for securities dealing, asset management, and fund operations.

The DLT Security: Technical Requirements and Legal Effects

The Registerwertrecht — the DLT security — is the DLT Act’s most important legal innovation. Understanding it precisely requires examining both its technical requirements and its legal effects.

Technical requirements. The Code of Obligations specifies that a distributed register hosting DLT securities must meet three cumulative conditions. First, the register must be tamper-resistant: its integrity must be protected by technical means against unauthorised alteration. Second, the register must be transparent to participants: those entitled to exercise rights under the registered instruments must be able to access and verify the register. Third, the register must enable independent exercise of rights: the registered holder must be able to exercise the rights attached to the security without requiring the cooperation of an intermediary or the register operator.

These requirements are technology-neutral. They describe functional properties that a distributed ledger must possess, not the specific technical architecture it must employ. Both permissioned blockchain platforms (such as R3 Corda) and public blockchain networks (such as Ethereum) can in principle satisfy these requirements, provided the specific implementation meets the statutory criteria.

Legal effects of transfer. Under the amended Code of Obligations, the transfer of a DLT security is effected by the corresponding transaction on the distributed register. There is no requirement for written assignment, no requirement for physical delivery, and no requirement for notification to the issuer or a transfer agent. The blockchain transaction is itself the legal transfer. This makes DLT securities the first category of security in Swiss law whose transfer mechanism is intrinsic to the instrument itself — not dependent on any external infrastructure.

Legal effects of pledge. The DLT Act similarly addressed the creation of security interests in DLT securities. A valid pledge over a DLT security — which under Swiss law requires “dispossession,” the equivalent of physical delivery for tangible assets — is created by the corresponding entry in the distributed register. No further formality is required. This enables the use of DLT securities as collateral in a legally certain manner.

Insolvency treatment. The combined effect of the Code of Obligations provisions and the Banking Act amendments is to give DLT securities the strongest available insolvency protection under Swiss law. Client DLT securities are segregated assets, not general creditor claims. In a custodian insolvency, DLT security holders have priority of return over general creditors.

The DLT Trading Facility: Combining Trading and Settlement

The DLT trading facility licence — FinfraG’s new infrastructure category — represents the regulatory architecture that makes SIX Digital Exchange possible. Before the DLT Act, no Swiss licence permitted a single entity to operate both the trading and settlement functions of a financial market. The Financial Market Infrastructure Act required these functions to be operated by separate, independently supervised entities.

The DLT trading facility removes this separation requirement for DLT-based platforms. A single FINMA-licensed entity may operate a platform that matches buy and sell orders in DLT securities and simultaneously settles those trades through blockchain transaction, without routing them through a separate central securities depository.

The regulatory rationale is that the DLT register itself performs the settlement function — title to the security changes at the moment of the on-chain transaction, with a finality that traditional T+2 settlement cannot match. Requiring a separate CSD to sit between the blockchain transaction and the legal transfer of title would be legally redundant and practically counterproductive.

FINMA granted the first DLT trading facility licence to SIX Digital Exchange AG in September 2021. SDX remains the only DLT trading facility licence holder in Switzerland and, as of 2026, the only such regulated entity globally.

International Significance: The Statutory Benchmark

The Swiss DLT Act’s international significance lies in what it is not, as much as what it is. It is not a pilot regime. It is not a sandbox. It is not temporary legislation designed to test market appetite before permanent rules are enacted. It is a permanent amendment to Switzerland’s permanent statutory framework.

Contrast this with the approach taken elsewhere:

The EU DLT Pilot Regime (Regulation (EU) 2022/858, applicable from March 2023) establishes a temporary, sandboxed infrastructure for DLT securities trading and settlement within the EU. Market participants must apply for an exemption from existing securities laws to operate within the Pilot Regime, which is limited to three years with a possible extension to six. Instruments eligible for the Pilot Regime are subject to strict size caps. The Pilot Regime explicitly acknowledges that it does not modify the underlying EU legal framework for securities — it temporarily suspends some provisions of that framework for participating entities.

The United States has no federal DLT securities statute. State-level initiatives — Wyoming’s digital asset legislation, Delaware’s blockchain amendments — provide partial solutions, but a US entity seeking to issue DLT securities navigates a patchwork of state law, SEC guidance, CFTC positions, and banking regulator opinion letters that collectively fall well short of the clarity Switzerland’s amended Code of Obligations provides.

The UK’s Digital Securities Sandbox (established 2024) takes a similar approach to the EU Pilot Regime: a temporary, constrained environment for testing DLT-based securities trading and settlement, explicitly designed as a precursor to potential permanent legislative change.

Switzerland, by contrast, made permanent legislative change the starting point. DLT securities are now an ordinary part of Swiss private law, with the same statutory certainty as bearer bonds or book-entry securities.

Post-DLT Act Developments: The Ecosystem Takes Shape

The five years since the DLT Act’s entry into force have confirmed Switzerland’s early-mover advantage.

SNB Project Helvetia demonstrated that a wholesale digital Swiss franc — a CBDC issued by the Swiss National Bank — could be used to settle DLT securities transactions in central bank money. The SNB conducted settlement of tokenised bonds on SIX Digital Exchange using d-CHF in a production-environment test, becoming the first central bank to settle tokenised bonds with CBDC. Project Helvetia’s results have informed the SNB’s ongoing assessment of a permanent wholesale CBDC for DLT securities settlement.

SIX Digital Exchange has listed tokenised bonds from UBS, Julius Baer, the World Bank, and SIX Group itself. The SDX participant roster has grown to include Swiss and international banks. Secondary market trading in DLT securities, while still modest in volume, is operational on a regulated, FINMA-supervised venue.

Sygnum Bank and AMINA Bank — both holders of Swiss banking licences — have established themselves as the leading issuers and custodians of DLT securities in the Swiss market. Sygnum’s August 2024 $50 million Bitcoin-backed syndicated loan demonstrated the continued expansion of DLT-based financial product innovation within the Swiss regulatory framework.

The Swiss DLT Act has proven, five years on, to be precisely what its drafters intended: a permanent, workable legal foundation for DLT-based financial markets. Its influence on subsequent legislative efforts in the EU, UK, and Singapore — all of which have studied and referenced the Swiss approach — confirms its standing as the global benchmark for DLT securities legislation.

Related Coverage

• SIX Digital Exchange: The World’s First Regulated DLT Securities Exchange
• The Swiss DLT Act at Three: Impact Assessment and Market Development
• Issuing Digital Bonds in Switzerland: The Registerwertrecht Framework and Step-by-Step Process
• Switzerland’s AMLA and Crypto: Anti-Money Laundering Obligations for DLT Businesses
• Distributed Ledger Technology (DLT): Definition and Types

Frequently Asked Questions

What is the Swiss DLT Act?

The Swiss DLT Act is a federal statute that amended eight existing Swiss laws to provide full legal certainty for distributed ledger technology-based assets, transfers, and market infrastructure. It entered into force on 1 February 2021 and created the world’s first permanent, comprehensive statutory framework for institutional DLT activity.

What is a Registerwertrecht under the DLT Act?

A Registerwertrecht is a DLT security defined in Article 973d of the Swiss Code of Obligations. It is a right incorporated in a distributed electronic register such that the holder can exercise it independently without any intermediary. The blockchain entry is itself the legal security, not merely a representation of one.

How does the DLT Act differ from the EU DLT Pilot Regime?

The Swiss DLT Act made permanent amendments to Switzerland’s mainstream statutory framework, while the EU DLT Pilot Regime is a temporary, sandboxed infrastructure with instrument size caps and a built-in three-to-six-year review period. Switzerland’s approach provides permanent legal certainty, whereas the EU approach explicitly suspends some provisions of existing securities law on a trial basis.

Donovan Vanderbilt is Editor of ZUG DLT, published by The Vanderbilt Portfolio AG, Zurich. This analysis is for informational purposes only and does not constitute legal advice. See our full Disclaimer.