Conflict of Laws and Tokens in Swiss Private International Law

Abstract

Switzerland figures among one of the first jurisdictions to include distributed ledger technologies (DLTs) in its legal framework through the recently adopted federal act commonly referred to as the DLT Act. In order to address the complex issue of determining the law applicable to tokens stored on a DLT, the DLT Act amended on 1 February 2021 the Swiss Private International Law Act (PILA), which now provides for conflict-of-laws rules that notably applies to tokens that embed a claim. This article aims to explain the context in which this amendment took place by providing an overview of the notion of tokens and presenting the main purposes of the DLT Act. It then presents and discusses the solutions chosen by the Swiss lawmaker, which follow the general principles that also generally prevail for other types of rights. As a result, the issuer of a token benefits from considerable freedom to determine the governing law of a tokenised claim. Absent a choice of law, the PILA sets forth subsidiary solutions based on the seat and the habitual residence of the issuer.