Swiss DLT Act — Tokenization Framework
The Federal Act on the Adaptation of Federal Legislation to Developments in Digital Ledger Technology (DLT Act), commonly known as “Lex DLT,” represents Switzerland’s landmark legislative response to blockchain technology. Approved by parliament on September 25, 2020, with the Code of Obligations amendments taking effect February 1, 2021, and the full act effective August 1, 2021, the DLT Act amended ten Swiss federal laws to create comprehensive legal infrastructure for tokenized securities, DLT trading facilities, and digital asset custody.
The BIS (Bank for International Settlements) cited the DLT Act as a model for global blockchain regulation — recognition that Switzerland’s approach to integrating blockchain into existing financial market law (rather than creating a separate regulatory silo) provides a template for other jurisdictions.
Ledger-Based Securities (Registerwertrecht)
The DLT Act’s most consequential innovation is the introduction of ledger-based securities (Registerwertrecht) into Swiss civil law. Article 973d et seq. of the Code of Obligations defines a new category of uncertificated security represented by an entry in an electronic register. The legal principle is straightforward: if you register a right (such as a share, bond, or membership interest) on a qualified electronic ledger, then transferring the token on that ledger transfers the underlying right.
This creates legal equivalence between tokenized and traditional securities. From a legal perspective, a bond tokenized on SDX’s distributed ledger carries identical rights and enforceability as a bond held through SIS (SIX’s traditional securities settlement system). The “digital” refers to the DLT infrastructure behind the main registry — not to a different legal category.
Three requirements must be satisfied for a ledger-based security to have legal effect. First, power of disposition: holders must retain full control and disposal rights over their tokens, meaning no intermediary can unilaterally freeze, transfer, or modify the token without the holder’s authorization (subject to court orders and regulatory enforcement). Second, integrity: the ledger must accurately reflect the legal status of the registered right, with protection against unauthorized changes — which distributed ledgers provide through consensus mechanisms and cryptographic immutability. Third, transparency: clear documentation of the rights represented by the token, the identity of holders (at the register level, not necessarily on-chain), and the terms governing registration and transfer.
The technology-neutral drafting is deliberate — the Act does not mandate blockchain specifically. Any distributed ledger technology that satisfies the three requirements can qualify as a qualified electronic register for Registerwertrecht purposes. This future-proofs the legislation against technological evolution while ensuring that currently dominant blockchain platforms (Ethereum, purpose-built enterprise DLTs) qualify.
Tokenizable Assets
The range of assets eligible for tokenization under the DLT Act is broad. Shares and equity participation rights in Swiss corporations (AG) and limited liability companies (GmbH) can be tokenized by registering them as ledger-based securities. Bonds and debt instruments, derivatives and structured products, fund units, mortgage certificates (Schuldbrief), commodity papers, and intellectual property rights can all be represented as Registerwertrecht.
The limitation is important: direct tokenization of land ownership (Grundeigentum) is not possible under current Swiss law. Land register entries remain off-chain — the Swiss land registry system operates independently of any distributed ledger. Real estate tokenization must therefore go through corporate or debt structures: tokenizing shares in a real estate holding company, bonds secured by real estate portfolios, or fund units in real estate investment vehicles.
DLT Trading Facility License
The DLT Act introduced a new FINMA license category specifically for DLT trading facilities — platforms that trade, custody, clear, and settle DLT securities. This license enables regulated crypto exchanges to operate under clear legal authority rather than relying on interpretive application of existing exchange licensing categories.
SDX Trading AG received the first FINMA license as a stock exchange, and SIX Digital Exchange AG received the first FINMA license as a central securities depository — making SDX the world’s first fully regulated financial market infrastructure for digital securities. BX Digital was approved in 2025 to operate a blockchain exchange, planning to list over 100 tokenized US stocks and ETFs.
DLT trading facilities can list DLT securities (Registerwertrecht), utility tokens, and payment tokens. The license presupposes that the platform provides at least one of trading, custody, clearing, or settlement services. The facility must comply with FINMA’s organizational requirements, capital requirements, and conduct rules — adapted from existing financial market infrastructure regulation but calibrated for DLT-specific operational characteristics.
Bankruptcy Protections
The DLT Act introduced explicit segregation rules for crypto assets held in custody during insolvency proceedings. Digital assets held by a custodian for clients are segregated from the custodian’s estate in bankruptcy — meaning client crypto assets are not available to the custodian’s general creditors. This protection applies to banks, securities firms, and DLT trading facilities that custody client digital assets.
This legal clarity was essential for institutional adoption. Before the DLT Act, the status of custodied crypto assets in Swiss bankruptcy proceedings was uncertain. Institutional investors — pension funds, asset managers, family offices — require legal certainty that their digital assets will be returned if their custodian becomes insolvent. The DLT Act provides that certainty through explicit statutory protection.
Impact and Adoption
The DLT Act has enabled significant institutional tokenization activity. The World Bank, in collaboration with the SNB and SDX, issued a CHF 200 million digital bond — the first CHF digital bond by an international issuer, settled in Swiss francs using wholesale CBDC through Project Helvetia. Total digital bonds settled on SDX using wholesale CBDC exceed CHF 750 million as of 2024. The City of Lugano issued a CHF 100 million bond settled exclusively in wholesale CBDC. The SNB issued CHF 64 million in SNB Bills on the SDX DLT platform — a world-first in monetary policy operations on DLT.
For non-listed private companies, the DLT Act opens capital formation pathways previously unavailable. SMEs can leverage tokenization to raise capital via online platforms open to diverse investor classes, including retail investors on secondary markets. The CMTA (Capital Markets and Technology Association) has developed the CMTAT — an open-source smart contract framework for tokenized securities compliant with Swiss law — which standardizes the tokenization process and reduces implementation costs for smaller issuers.
Data Privacy Considerations
Public blockchains present enforcement challenges for Swiss data protection rights. Personal data recorded on an immutable public ledger cannot be deleted, creating tension with the GDPR right to erasure and Swiss data protection principles. Solutions include cryptographic hash functions for on-chain data (storing only a hash rather than personal data), off-chain storage with on-chain hash verification, and explicit data-processing consent obtained before any personal data touches the blockchain. The DLT Act does not resolve these tensions definitively, leaving practical solutions to market participants and future regulatory guidance.
Participating Banks and Institutional Adoption
The institutional adoption of the DLT Act framework extends beyond SDX and BX Digital to encompass a growing roster of Swiss financial institutions. UBS, Zurcher Kantonalbank, Banque Cantonale Vaudoise, Basler Kantonalbank, Commerzbank, Hypothekarbank Lenzburg, Berner Kantonalbank, and Kaiser Partner Privatbank have all participated in tokenized bond issuances or SDX’s central securities depository. Hypothekarbank Lenzburg — a traditional Swiss bank founded in 1868 with CHF 7.23 billion in total assets — joined SDX’s CSD in 2024 as the sixth member bank, demonstrating that the DLT Act framework attracts established institutions alongside crypto-native firms.
In 2025, Citi joined SDX as custodian and tokenization agent, launching an industry-first solution for the tokenization, settlement, and safekeeping of pre-IPO shares. This partnership enables high-growth, venture-backed private companies to be accessible to institutional investors via SDX — expanding the DLT Act’s impact from bonds and public securities to private market assets. SBI Digital Markets (Singapore) facilitates access for Asian institutional clients, creating global distribution for Swiss-tokenized assets.
The scope of tokenizable instruments under the DLT Act continues to expand in practice. SDX launched a Digital Collateral Service in February 2025, enabling financial institutions to post selected cryptocurrency assets as collateral alongside traditional collateral — integrating digital and conventional assets within a single regulated infrastructure. This service leverages the DLT Act’s broad definition of tokenizable assets and the legal clarity around digital asset custody in insolvency.
SME Financing and Capital Formation
For small and medium-sized enterprises, the DLT Act represents a transformative capital formation pathway. Before the Act, non-listed private companies faced limited options for raising capital from diverse investor classes. Traditional share issuance required paper-based processes, notarial involvement, and restricted transferability. The DLT Act’s Registerwertrecht enables these companies to tokenize their shares, creating digital securities that are legally equivalent to traditional shares but transferable on DLT infrastructure.
The practical benefit is direct: an SME can issue tokenized shares on a platform compliant with the DLT Act, making them available to a broader investor base including retail investors on secondary markets operated by licensed DLT trading facilities. The CMTA Token Standard (CMTAT) — developed by the Capital Markets and Technology Association — provides an open-source smart contract framework that reduces implementation costs and standardizes the tokenization process for smaller issuers who lack the resources to build custom smart contract infrastructure.
RealUnit Schweiz AG exemplifies this pathway. The company issued digital registered securities (ledger-based securities) on Ethereum, custodied by Hypothekarbank Lenzburg — combining the DLT Act’s legal framework with traditional banking custody to create an institutional-grade issuance pathway accessible to companies far smaller than those typically served by SDX. This demonstrates that the DLT Act’s benefits are not limited to large-scale bond issuances but extend to the SME sector that forms the backbone of the Swiss economy.
International Recognition and Influence
The Bank for International Settlements cited the DLT Act as a model for global blockchain regulation, recognizing that Switzerland’s approach — integrating blockchain into existing financial market law rather than creating a separate regulatory silo — provides a template for other jurisdictions seeking to accommodate distributed ledger technology within their legal systems.
The Act’s influence extends beyond regulatory philosophy to concrete institutional collaboration. Project Agora, announced in April 2024 by the BIS, brings together central banks from Switzerland, South Korea, France, England, Japan, Mexico, and the United States to explore how tokenization of wholesale central bank money can improve the monetary system. Switzerland’s participation, anchored in the operational experience of the DLT Act and Project Helvetia, provides practical insights that inform global policy development.
The DLT Act also positions Switzerland competitively against jurisdictions developing their own tokenization frameworks. The EU’s MiCA regulation creates a prescriptive framework for crypto assets but does not provide equivalent legal infrastructure for tokenized securities — asset-referenced tokens under MiCA are a different legal instrument than Registerwertrecht under the DLT Act. This legal innovation gives Swiss-domiciled tokenization platforms a structural advantage for institutional-grade securities issuance. Our Switzerland vs EU MiCA comparison analyzes these regulatory divergences in detail.
Future Legislative Development
The Federal Council’s October 2025 legislative proposal builds on the DLT Act’s foundation. The proposed payment institution and crypto institution licenses will create dedicated regulatory pathways for entities operating within the DLT Act’s infrastructure — stablecoin issuers settling on DLT platforms, wallet providers custodying Registerwertrecht, and market makers providing liquidity for tokenized securities.
The evolution from the DLT Act’s broad enabling framework to the 2025 proposal’s specific license categories reflects the maturation of the Swiss tokenization ecosystem. In 2021, the priority was creating legal infrastructure — making tokenization possible. By 2025, the priority has shifted to regulatory precision — creating proportionate license categories that match the specific risk profiles of different activities within the tokenization value chain.
The DLT Act remains the foundational legislation. The new license categories operate within the DLT Act’s legal framework — Registerwertrecht remains the legal instrument, DLT trading facilities remain the licensed venues, and bankruptcy protections remain in force. The 2025 proposals refine the regulatory apparatus around the DLT Act rather than replacing it.
For the regulatory framework governing token issuance under the DLT Act, see our FINMA token classification analysis. For entity profiles of DLT trading facilities, visit the Crypto Valley section. For DAO governance implications of tokenized equity and membership rights, explore our governance coverage. For the AML/KYC obligations applicable to DLT trading facility operations, see our AML/KYC framework analysis. Track tokenized bond volumes on our tokenized bond dashboard. For external regulatory documentation, consult the Swiss State Secretariat for International Finance.