Ledger-based securities - Swiss Code of Obligations

February 1, 2021 the Swiss legislator amended the Code of Obligations (CO) to support the development of the distributed ledger technology and blockchain.

The legislation (articles 973d and following CO) allows tokens to qualify as securities based on an agreement between parties. The token is then registered in a security ledger and transferred using solely that same ledger.

Through this vehicle, companies in Switzerland can for example issue their shares as tokens on a blockchain. Furthermore, the structure allows asset and utility tokens as well as stablecoins to be used. In short, tokens playing the same role as securities are eligible for a ledger based register.

A blockchain and especially tokens can have many uses and a different legal qualification depending on their parameters.

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