An Examination of Distributed Ledger Technology Based Negotiable Instruments Regulations in Switzerland
Dr. Öğr. Üyesi Özlem Ata Polat*
The widespread recognition of Distributed Ledger Technology (DLT) has been made possible through a technology known as blockchain, which is a type of DLT. DLT enables the issuance, transfer and recording of digital assets without the need for a central authority. Today, it is seen that regulations are being adopted to facilitate the issuance and recording of transactions of negotiable instruments using DLT.
The Swiss DLT Law, along with its implementing regulations, came into effect in 2021. Its aim is to establish a legal framework for DLT for the transfer of rights through this technology. Rather than creating an entirely new law for DLT, it was deemed sufficient to amend existing laws, making them compatible with DLT, based on the belief that current regulations are adequate. Also, in the DLT Act, terms such as “distributed ledger technology” or “blockchain” have been avoided by adopting the “technological neutrality” approach to include potential future technologies.
Significant changes introduced by the DLT Act are the amendments made to the Swiss Code of Obligations. These amendments have introduced a new type of negotiable instrument that functions similarly to traditional securities, offering the same level of protection while enabling the electronic recording of rights. The amendments made to the Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading and to the Federal Act on Intermediated Securities are also important changes since the DLT trading platforms have been included alongside other multilateral trading facilities, stock exchanges and custodians. In this study, we try to examine the details of such amendments to those acts.
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Key words: Negotiable Instruments, Distributed Ledger Technology, Crypto-Assets, Securities
* Yeditepe University Law School, Department of Commercial Law