Switzerland's government said today that it is "swiftly" moving toward a legal designation of digital currencies.
In a statement, the Swiss Federal Council – a body of seven that collectively serve as Switzerland's head of state – revealed the first major steps of its plans to regulate fintech development in the country. CoinDesk reported in February that the government was moving to put a legal framework for fintech in place. The new rules, approved on July 5, go into effect in August.
Among the initiatives launched today is a regulatory "sandbox" aimed at creating a more accommodative environment for startups. Firms that accept fewer than 1 million Swiss francs (roughly $1m USD) "will be exempt from authorization" the Federal Council said. The group clarified that depositors with these firms would not be covered under the country's deposit protection rules.
What remains unclear is precisely how the country will regulate digital currencies, though the government indicated that it wants to move quickly to put a "legal qualification" in place, stating:
"The Federal Council will continue to closely follow further developments in the areas of digitalisation and fintech, and examine further regulatory measures. The corresponding work, i.e. on clarifying the legal qualification of virtual currencies, has been taken over and is to be swiftly pursued."
The outcome of the process could have implications for both exchange startups working in the country as well some of the businesses that work with digital currencies, including Swiss rail service SBB, which began selling bitcoin through its ticket kiosks last fall.
Switzerland has emerged as a hub for startups working with the tech, and some of its municipal bodies have moved to integrate blockchain into their operations. Last week, the city of Zug revealed that it is launching a digital identity service that, beginning in September, will use technology developed by the ethereum development community ConsenSys and Swiss startup ti&m.