The Swiss DLT Act: How Switzerland Wrote Tokenized Securities Into Law

Key Takeaways

The DLT Act is not a "blockchain law": passed by Parliament in September 2020, it is an amending act that adapts around ten existing federal statutes. It entered into force in two stages, on February 1 and August 1, 2021.
Since February 2021, a security can be born directly on a blockchain: the ledger-based security (art. 973d et seq. of the Swiss Code of Obligations) gives a token the legal functions of a certificated security. The right transfers through the electronic ledger, and good-faith acquirers are protected.
A custodian's bankruptcy no longer swallows the tokens: art. 242a of the Debt Enforcement and Bankruptcy Act allows crypto-assets held by a failed custodian to be reclaimed, provided they were kept at the client's disposal at all times and attributed to the client individually, or to a community with a clearly determined share.
A new market infrastructure exists: the DLT trading facility (Financial Market Infrastructure Act) may combine trading, settlement, and custody in a single entity. SDX was licensed in 2021 through the traditional route (stock exchange plus central securities depository); BX Digital received the first DLT trading facility license in March 2025, with settlement on the public Ethereum blockchain.
Practice is following: a CHF 375 million UBS digital bond in 2022, a CHF 200 million World Bank bond in 2024, and six digital bonds totaling more than CHF 750 million settled in wholesale central bank digital currency by mid-2025. The SNB has extended its pilot until at least mid-2027.
What remains open: secondary-market liquidity is still modest, direct ownership of land remains outside the scope of tokenization, and the international reach of a ledger-based security depends on the law applicable outside Switzerland.

Introduction

Picture a share that exists on no paper and in no central securities depository – only as an entry on a blockchain. Can it be sold, pledged, or reclaimed in a bankruptcy? In most jurisdictions, answering still requires contractual detours. In Switzerland, since February 1, 2021, the answer fits in one statutory article: yes, if it is issued as a ledger-based security under art. 973d of the Code of Obligations.

Discussions of asset tokenization tend to lead with technology: token standards, public versus private blockchains, smart contracts. Our article on real estate tokenization describes what that technology promises for real-world asset markets. But the most stubborn obstacle was never technical – it was legal. A token can represent a right; what matters is that transferring the token transfers the right itself, with effect against everyone.

That is precisely what Switzerland resolved with the Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology – the "DLT Act." This article looks at what the law changes in practice: for issuers, for investors, and for the market infrastructure that has been built since.

The Real Obstacle Was Never Technical

Securities law has rested for centuries on one simple idea: embed a right in an object so it can circulate. The classic certificated security ties the claim to a physical document; whoever holds the certificate can exercise the right, and handing over the paper transfers the claim. Dematerialization in the 1990s and 2000s replaced paper with book entries, governed by the Intermediated Securities Act for securities held with banks and central depositories.

One intermediate category remained: plain uncertificated securities, rights recorded in a simple register kept by the issuer, with no certificate and no depository. Transferring them required a written assignment. And that is where tokenization ran aground: a token moving between wallets on a blockchain produces no written assignment. Before 2021, the holder of a token that supposedly represented a share held, at best, a contractual claim against the issuer; the right itself had not necessarily followed the token. Early Swiss tokenizations therefore ran on ingenious but fragile contractual scaffolding whose robustness in a dispute or bankruptcy remained untested.

Lawmakers could respond in one of two ways: create a special law of tokens, or extend existing law. Switzerland chose the second.

An Amending Act, Not a "Blockchain Law"

The DLT Act, passed by the Federal Assembly in September 2020, creates no special regime. It is a single amending act that adapts around ten existing federal statutes – the Code of Obligations, the Debt Enforcement and Bankruptcy Act, the Intermediated Securities Act, the Financial Market Infrastructure Act, the Banking Act, and private international law, among others. The Federal Council brought it into force in two stages: February 1, 2021 for the civil-law part (ledger-based securities) and August 1, 2021 for the rest, including the new market-infrastructure license.

That choice of method sets Switzerland apart from its neighbors. Liechtenstein enacted a standalone token act (TVTG), which entered into force in 2020, creating an entirely new framework. The European Union took yet another route: the MiCA regulation covers crypto-assets that are not financial instruments, while tokenized securities fall under ordinary financial-market rules, supplemented by a temporary "pilot regime" for DLT-based infrastructures, applicable since March 2023. Switzerland wrote the token into its ordinary securities law – with no sunset date, no sandbox, and no new authority.

That quietness is the most revealing feature of the framework: tokenization is not treated as an experiment to be monitored, but as an ordinary way of issuing and transferring securities.

The Ledger-Based Security: A Token With the Effects of a Certificate

The civil-law core of the reform sits in art. 973d et seq. CO. A ledger-based security is a right that, under an agreement between the parties (the "registration agreement"), is registered in a securities ledger and can be exercised and transferred only through that ledger.

The law mentions neither blockchain nor token: it sets functional requirements the ledger must meet. In essence:

creditors, not the debtor, have the power of disposal over their rights by means of technical processes;
the ledger's integrity is protected against unauthorized modification by adequate technical and organizational measures, such as joint management by several participants independent of one another;
the content of the rights, the functioning of the ledger, and the registration agreement are recorded in the ledger or in accompanying data;
creditors can view the information concerning them and verify the ledger's integrity without a third party's involvement.

A properly designed blockchain meets these conditions; that is the use case lawmakers had in mind, while leaving the door open to other technologies.

The effects are those of securities law proper: transfers occur through the ledger, a debtor who performs toward the registered creditor is discharged, and good-faith acquirers are protected. Put simply, the token no longer represents the right – it carries the right. Shares, bonds, and structured products can be issued natively on a blockchain, including, to name a wrapper characteristic of the Swiss market, actively managed certificates, which several securitization platforms now offer as ledger-based securities.

One limit deserves naming: direct ownership of land cannot be tokenized. Transferring a property runs through the land register, which the DLT Act left untouched. What the market calls "real estate tokenization" actually involves vehicles – shares of property companies, bonds, fund units – whose underlying assets are real estate. That nuance matters when reading the sector's promises.

Bankruptcy: The Blind Spot art. 242a DEBA Closed

For an institutional investor, the decisive question is not "does the token work?" but "what happens to my assets if my custodian fails?" Before the DLT Act, the answer was uncertain: bankruptcy law allowed the reclaiming of objects, a notion crypto-assets fit poorly.

The new art. 242a DEBA answers directly: crypto-assets held by a bankrupt party can be segregated from the bankruptcy estate and returned to the entitled party, under two conditions. The bankrupt party must have undertaken to keep them at the client's disposal at all times; and they must be attributed to the client individually, or to a community in which the client's share is clearly determined.

This rule, together with the Banking Act adjustments covering crypto-asset custody, turned digital-asset safekeeping into a legally charted activity. It is no coincidence that digital-asset banks and institutional custodians grew in Switzerland precisely from that period onward.

DLT Trading Facilities: Infrastructure, Redesigned

The part that entered into force on August 1, 2021 creates a new category of financial market infrastructure: the DLT trading facility (art. 73a et seq. FinMIA). Its distinctiveness lies in two freedoms traditional exchanges lack: it may admit participants who are not prudentially supervised, including private individuals; and it may combine trading, settlement, and custody in a single entity, where the traditional model separates the exchange, the central counterparty, and the central securities depository.

In practice, two routes coexist today:

The traditional route applied to tokens: in September 2021, FINMA authorized SIX Digital Exchange as a central securities depository and SDX Trading as a stock exchange – the first approval of its kind worldwide for infrastructures dedicated to trading securities in token form, according to the authority. SDX operates an integrated chain of issuance, trading, settlement, and custody on a permissioned distributed ledger.
The DLT license proper: in March 2025, FINMA granted BX Digital, a sister company of the BX Swiss exchange within the Boerse Stuttgart Group, the first DLT trading facility license. Effective since May 2025, it permits multilateral trading of DLT securities with delivery-versus-payment settlement via smart contract on the public Ethereum blockchain – a world first for a regulated infrastructure, according to the operator. The offering is aimed at supervised participants, typically banks.

Four years separate the law from its first dedicated license: the pace says something about the regime's prudential requirements, which largely mirror those of traditional infrastructures.

Very Real Issuances: Digital Bonds and Central Bank Money

The legal framework has not stayed theoretical. In November 2022, UBS issued a CHF 375 million digital bond (2.33% coupon, three-year maturity), presented by the bank as the world's first digital bond publicly traded and settled on both a blockchain-based infrastructure (SDX) and a traditional exchange (SIX). Swiss cantons and cities followed with digital bonds of their own, and by spring 2024, total issuance on the SDX platform had passed CHF 1.3 billion according to industry tracking.

The most significant step came from the central bank. Since December 2023, under Project Helvetia, the Swiss National Bank has issued wholesale central bank digital currency (wCBDC) on SDX to settle digital bonds – a world first on a regulated third-party platform. By mid-2025, six digital bonds totaling more than CHF 750 million had been settled this way, according to SIX Digital Exchange. In May 2024, the World Bank joined with a CHF 200 million digital bond settled in central bank digital currency.

In June 2025, the SNB extended the pilot until at least mid-2027 and widened its scope: BX Digital received production access to the SIC interbank payment system to test settling tokenized assets in traditional central bank money. The SNB is careful to note that the extension implies no commitment to introducing wholesale CBDC permanently – but the Swiss experiment is, to date, among the most advanced of its kind anywhere.

What the Law Did Not Solve

A complete legal framework does not make a deep market; honesty requires measuring the gap between the two.

Liquidity cannot be legislated. Volumes traded on digital infrastructures remain modest next to traditional markets. Most digital issuance so far has come from blue-chip issuers in a partly experimental setting; the secondary market is only beginning to form.
Direct real estate stays out of scope. As long as the land register is not involved, real estate tokenization will run through interposed vehicles, with the layers of cost and governance they bring.
Taxes follow the underlying. Issuing a right in token form does not change its tax nature: a tokenized bond is still a bond. The technological form creates neither an advantage nor a penalty by itself.
International reach has limits. The ledger-based security is an institution of Swiss law; the DLT Act adapted private international law to clarify the applicable law, but recognition of a Swiss tokenized security abroad depends, as always, on each jurisdiction's conflict-of-law rules.

Alongside the statute runs quieter market plumbing: technical and contractual standards, such as those published by the Capital Markets and Technology Association (CMTA) for tokenizing shares of Swiss companies, supply the practitioners' manuals the law itself does not.

Conclusion

Switzerland made a singular choice: no landmark statute, no experimental regime – just a few articles inserted into a code of obligations more than a century old. That pragmatism produced a result few jurisdictions can claim: since 2021, a tokenized security there is a security in the fullest sense, from transfer to bankruptcy, from issuance to settlement in central bank money.

The contrast between the framework's maturity and the market's youth defines the current period. Licenses have been granted, benchmark issuers have shown the way, and the central bank is running its pilot until at least mid-2027: the coming years will tell whether volumes catch up with the infrastructure. For investors, understanding this legal foundation is the prerequisite for any serious reading of tokenization's promises – the ones we describe in our article on tokenized real-world assets and the ones that travel through wrappers like actively managed certificates.