Swiss Government Places Big Bets On Stablecoin And Crypto

• The Swiss government proposes two significant amendments to its financial laws to accommodate stablecoin and crypto innovations.

Switzerland is home to a robust financial market. It is also the breeding ground of old and emerging powerhouses in the blockchain and digital assets space. Zug is known as a hub for these players due to its favorable regulatory environment and tax rules.

However, digital asset penetration in the country’s financial sector lags behind other heavy hitters in the crypto industry. It didn’t even land in the Chainalysis 2025 Global Crypto Adoption Index Top 20, which was mostly filled by nations in the Asia-Pacific (APAC) region.

Cash remains king in Switzerland’s daily payments, but the federal government’s latest advance may soon turn the tide significantly.

ADVERTISEMENT## Stablecoin and Crypto Amendments in the Financial Institutions Act

Last October 22, the Swiss government held a meeting to discuss the Federal Council’s proposed amendments to the Financial Institutions Act (FinIA). The proposal introduces two new license categories for payment instrument institutions and crypto-institutions.

FinIA governs the licensing and organizational requirements of financial institutions operating in Switzerland. It covers portfolio managers, trustees, managers of collective assets, fund management companies, and securities firms.

The law ensures the protection of investors and clients of the mentioned entities. Additionally, it provides financial stability safeguards to the economy.

ADVERTISEMENT## The Stablecoin and Crypto-Focused Proposals

According to a press release, the new license aims to revise the current fintech (financial technology) licensing to accommodate stablecoins. It then enumerates several obligations for issuers and custodians of these digital assets to establish consumer protections against insolvency or bankruptcy, and to reinforce their anti-money laundering mechanisms and other due diligence requirements.

The move would effectively bring stablecoin issuers under the net of Swiss financial laws. The Financial Times suggested that it’s a precursor to the Swiss government’s stronger support for stablecoins to bolster treasury demand, similar to the United States’ bold maneuver with the passage of the GENIUS Act.

The Swiss government defines stablecoins as crypto assets pegged to the value of their underlying assets and supported by a value-stabilizing mechanism.

New provisions would also touch licensing and operating criteria for crypto-institutions. To emphasize its progressive stance, the Swiss government wants the rules governing crypto companies to be more lenient compared to traditional securities firms. Moreover, it highlighted that crypto service providers should meet requirements for the prevention of conflicts of interest in order to level the playing field, avoid market manipulation, and prevent the unjust enrichment of bad actors in the industry.

Consultations on the amendments already started on October 22 and will run until February 6 next year.

Striking a Balance in the Rules

Analysts warned that the Swiss government should strike a balance in the delicate rules to prevent reputational blowback and avoid alienating traditional financial institutions. Furthermore, there’s an ongoing debate about whether it will truly strengthen or undermine the conventional banking model.

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