Switzerland: A FinTech Overview

FinTech/Crypto Regulations

Switzerland provides a clear regulatory framework for FinTech companies, crypto custodians and staking providers, based on two key principles: “substance over form” and “same business, same rules”. This framework is currently being reviewed in order to increase legal certainty and boost innovation. The Swiss Financial Market Supervisory Authority (FINMA) aims its supervision in this area at balancing innovation with investor protection and market integrity.

FinTech companies may benefit from a special “FinTech licence”, which allows for certain regulatory facilitations to promote technological advancement but also allows for deposit taking of up to CHF100 million. Crypto custodians are required to comply with anti-money laundering regulations but are otherwise unregulated if the custody is structured to ensure that clients’ crypto-assets can be segregated if the custodian goes into bankruptcy. For staking providers, the regulatory status and treatment depend on the specific manner in which such staking is undertaken. FINMA’s guidance offers details on these matters, reflecting Switzerland’s commitment to fostering a secure and innovative financial sector.

In a noteworthy development in the context of Switzerland’s crypto regulation, Swiss-based digital asset exchange BX Digital received a licence from FINMA as a DLT-Trading Venue in 2025. BX Digital leverages blockchain technology to enable secure and decentralised trading, and offers a DLT trading facility under Swiss financial market law, ensuring reliable and efficient transactions. This development represents a major step forward in integrating blockchain technology into traditional financial systems.

FinTech-Specific Regulation

Swiss FinTech-specific regulation comprises three “pillars”:

• the FinTech licence;
• a regulatory innovation area (“sandbox”); and
• the settlement accounts exemption.

FinTech licence

The Swiss Banking Act provides for two licensing categories:

• the regular banking licence; and
• the FinTech licence (also referred to as a “banking licence light”).

With the FinTech licence, companies not engaging in classic banking business (interest rate differential business – eg, by using short-term deposits for long-term lending or investment activities) now have a viable regulatory alternative. The FinTech licence is attractive for companies that are mainly active in the financial sector but limit their operations to accepting either deposits of less than CHF100 million or crypto-assets, and do not invest the accepted funds nor pay interest thereon. Therefore, the licence may, for example, be attractive to companies offering payment services or platform funding services.

If the maximum deposit threshold of CHF100 million is exceeded, the company must notify FINMA within ten days and must submit a regular bank licence application within 90 days.

Sandbox

The “sandbox” exemption allows a company to engage in activities that would have triggered bank licensing requirements under the former regulation. Companies accepting deposits from the public are deemed not to be acting on a commercial basis if:

• the deposits or crypto-assets accepted do not exceed the threshold of CHF1 million;
• the company does not engage in the interest rate difference business; and
• the clients are informed prior to depositing the funds that the company accepting the funds is not supervised by FINMA and that the funds are not protected by the Swiss deposit insurance regime.

The “sandbox” exemption is designed to create a regulatory safe harbour, in which FinTech companies are able to test their business ideas and provide certain financial services without becoming a regulated entity under Swiss banking regulation. However, it must be noted that companies engaging in activities within the “sandbox” are still likely to be subject to Swiss anti-money laundering regulations (and may therefore need to adhere to certain regulatory requirements under Swiss law). Therefore, the “sandbox” should not be misunderstood as a “regulation free” area.

FINMA Guidance on Staking of Crypto-Assets

On 20 December 2023, FINMA issued guidance on the treatment of staking services under Swiss financial market regulatory laws (the “Guidance”), which provided certain clarifications regarding the regulatory treatment of staking services. Pursuant to the Guidance, the regulatory requirements applicable to the relevant staking services differ depending on whether the relevant service provider is engaging in deposit taking or merely acting on a fiduciary basis when accepting crypto-assets from its clients.

Custodian’s obligation to ensure crypto-assets’ “immediate availability” remains key

The Guidance’s approach to determining whether the staking service provider is engaging in regulated deposit-taking or is merely acting on a fiduciary basis is based on the three tiers of crypto-asset custody that were introduced under the Distributed Ledger Technology (DLT) Act.

As the main requirement for determining which of the two analyses applies to Swiss staking service providers, the Guidance focuses on the obligation to ensure the immediate availability of the crypto-assets and how such obligation may be affected by different staking arrangements in constellations under which staking involves the possibility of lock-ups or slashing.

For the fiduciary analysis to apply to Swiss non-bank staking service providers engaged in the direct staking of payment tokens, the Guidance requires that the staked payment tokens continue to be held in individual custody, with a separate and assignable blockchain address for each client (at the level of the original custody address, the staking address and the withdrawal address).

Delegation by a licensed bank or securities firm to a third-party provider of staking services

For the fiduciary analysis to apply with respect to a Swiss bank or securities firm that appoints a third-party staking service provider to provide staking services to the institution’s clients, the bank or securities firm must enter into a fiduciary agreement with the client that contains a specific fiduciary mandate from the client, including the selection of crypto-assets and the amount. In FINMA’s view, the bank acquires a contractual claim against the third-party staking service provider for the return of the staked crypto-assets, and the fiduciary agreement is intended to ensure that the fiduciary analysis applies to this contractual claim.

AI Regulation

Since OpenAI made ChatGPT publicly available in November 2022, the considerable potential of AI in numerous industries has become apparent to the broader public. AI offers vast possibilities, but it also poses significant risks to civil society, law and government; the pursuit of progress raises important and complex policy and ethical questions. Governments around the world have been racing to catch up with technology’s progress and establishing plans for the potential regulation of AI, with the European Union recently announcing that the policymakers have reached an agreement on the key elements of a comprehensive AI Act.

In view of these international developments, in late November 2023, the Federal Council instructed the Federal Department of the Environment, Transport, Energy and Communication (DETEC) to draft an overview of possible regulatory approaches to AI by the end of 2024. Based on the DETEC’s conclusions and an additional assessment conducted by the Federal Department of Justice (FDJ), the Swiss Federal Council has now mandated the FDJ to draw up a legislative draft providing for statutory rules regarding transparency, data protection, non-discrimination and supervision in the context of the use of AI.

in addition, under the FINMA Guidance 08/2024 – Governance and Risk Management when using AI, FINMA has published its regulatory expectations regarding the use of AI by Swiss regulated financial institutions. Thereunder, FINMA expects financial institutions to:

• integrate the relevant use of AI internal governance and operational risk management;
• disclose the use of AI in client-facing activities; and
• ensure the quality and accuracy of the underlying data, among other matters.

Tokenised Bank Deposits

The Swiss Bankers Association (SBA) recently announced that payments with digitised bank deposits via a public blockchain had been successfully executed in a legally compliant manner, under a joint project with a group of Swiss banks. Pursuant to the SBA’s feasibility report, the utilised deposit token brings bank deposits onto the blockchain and enables the execution of payments via a blockchain on a fully digitalised and automated basis.