The Evolution of Cryptocurrency Regulation in Switzerland Prior to 2024

Switzerland, renowned for its robust financial sector and progressive economic policies, has emerged as a global leader in the cryptocurrency space. Prior to 2024, the country developed a comprehensive and forward-thinking approach to regulating cryptocurrencies and blockchain technology, fostering innovation while ensuring stability and security in financial transactions.

Government Stance and Regulatory Environment

Switzerland’s government and the Swiss Financial Market Supervisory Authority (FINMA) demonstrated a highly positive attitude towards blockchain and distributed ledger technology (DLT). Recognizing the potential these technologies offer to the financial services industry and beyond, Switzerland sought to position itself as a global leader in this sector​​.

Unlike many countries, Switzerland classified cryptocurrencies as an asset class, aligning the treatment of virtual currencies with other asset classes like property or gold. This classification, along with the Swiss Federal Tax Administration’s (SFTA) clear taxation rules for cryptocurrencies, removed ambiguity concerning the sale or transfer of virtual currencies​​.

Licensing and Regulation by FINMA

FINMA played a crucial role in regulating virtual currency activities. It deemed cryptocurrency exchanges legal as long as they obtained the necessary licenses. Depending on the blockchain project’s nature, FINMA issued various types of crypto licenses, such as fintech, exchange, investment fund, or banking licenses. These licensed entities were subject to Switzerland’s Anti-Money Laundering Act (AMLA) and other federal regulations to combat money laundering and terrorist financing​​.

In 2021, FINMA approved the Crypto Market Index Fund, the first Swiss fund primarily investing in crypto-based assets, demonstrating a significant regulatory milestone​​.

The Blockchain Act and Swiss Crypto Valley

The 2020 Blockchain Act, enforced in 2021, was a pivotal moment for Switzerland’s crypto regulatory landscape. It amended the country’s securities law to provide a legal basis for trading cryptocurrencies, considered private assets by definition, and established a framework for Segregated Token Offerings (STOs). The act created a new license category for DLT or blockchain-based trading systems under FINMA’s supervision, further reinforcing Switzerland’s position as a hub for blockchain technology​​.

This legal framework led to the emergence of the Swiss Crypto Valley in Zug, which became a home to numerous crypto firms, developers, service providers, and advisers, cementing Switzerland’s status as Europe’s fastest-growing crypto hub​​.

Taxation of Cryptocurrencies

For tax purposes, cryptocurrencies were converted into Swiss francs, with the FTA providing year-end conversion rates for major cryptocurrencies. These assets were subject to wealth taxes, and the rules for declaring cryptocurrencies varied across cantons​​. Capital gains on cryptocurrencies were generally exempt from income tax for individuals unless held as part of business assets. Corporations were subject to corporate income tax on net taxable earnings from the sale of cryptocurrencies​​​​.

VAT and Anti-Money Laundering Measures

Cryptocurrencies were treated similarly to legal tender for VAT purposes, exempting trading or exchange activities and related services from VAT​​. The AMLA provisions applied to cryptocurrency activities, with revised regulations clarifying that services related to the transfer of virtual currencies are subject to AMLA if provided in a permanent business relationship​​​​.


Prior to 2024, Switzerland’s approach to cryptocurrency regulation was marked by a balance between embracing innovation and maintaining robust financial oversight. The country’s regulatory framework, led by FINMA and supported by the Swiss government, provided clarity and security for investors and companies in the cryptocurrency space. By adapting its laws and regulations to accommodate the burgeoning world of digital assets, Switzerland established itself as a leading destination for blockchain and cryptocurrency ventures.

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