Swiss authorities claim bitcoin is too "insignificant" to regulate

Home » Swiss authorities claim bitcoin is too "insignificant" to regulate
Image credit: https://www.flickr.com/photos/zcopley/

Image credit: https://www.flickr.com/photos/zcopley/

In a new report published by Switzerland’s Federal Council, regulators claim that the “economic importance of virtual currencies as a means of payment is fairly insignificant at the moment.” The report claims that bitcoin and other digital currencies will have a marginal effect on the Swiss economy for the “foreseeable future,” and no influence on the policies of the Swiss National Bank. As a result, the report suggests that regulating bitcoin isn’t worth the hassle, at least at the moment.

The council’s report does note that bitcoin and other cryptocurrencies “carry substantial risks of loss and abuse for users,” but notes that such transactions do not take place in a “legal vacuum.” The report claims that business conducted in bitcoin falls under the same legal jurisdiction as other transactions, and that contracts involving digital currency as just as enforceable as those using other commodities.

In other words, Swiss regulators don’t see the need for additional regulation of bitcoin, because bitcoin is no different than any other commodity or currency. Existing laws are perfectly applicable.

Certain business models based on virtual currencies are subject to financial market laws and need to be subjected to financial market supervision. Professional trade in virtual currencies and the operation of trading platforms in Switzerland generally come under the scope of the Anti-Money Laundering Act. This includes compliance with the obligation to verify the identity of the contracting party and establish the identity of the beneficial owner.

As a result, the Federal Council says that the bitcoin is currently a “marginal phenomenon,” and that “there is no need for legislative measures to be taken at the moment.” The report does note that the council is monitoring bitcoin’s growth, and will update its opinion should any regulatory action be required in the future.

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