CMTA publishes its debt tokenization standard

Tokenization of securities under Swiss law

Switzerland is one of the few jurisdictions that provides an explicit statutory basis for the process by which financial instruments – such as equity or debt securities, as well as derivatives, structured products, or certain types of funds – can be "tokenized," i.e. linked to digital tokens recorded on a distributed ledger such as a blockchain, in such a way that one cannot be transferred without the other.

Under Swiss law, the approach is to treat tokenized securities – referred to as "ledger-based securities"– in the same manner as certificated securities, i.e. securities issued in the form of physical certificates. If the ledger on which the tokens are recorded meets the legal requirements (broadly speaking, being distributed), an issuer may use it to issue securities in the form of ledger-based instruments. These instruments are then granted a legal regime similar to that applicable to certificated securities, particularly for what regards the protection of good-faith acquirers. The legal connection between the security and the digital token recorded on the ledger is established through "tokenization terms" (convention d'inscription / Registrierungsvereinbarung) – a document adopted by the issuer that stipulates that the transfer or encumbrance of the security requires the transfer of the associated digital token.

CMTA's debt tokenization standard

CMTA's standard provides practical support and guidance for the issuance of debt instruments as ledger-based securities. It identifies the types of securities eligible for tokenization, outlines the steps involved in the tokenization process, and addresses certain post-tokenization considerations – such as compliance with anti-money laundering regulations and international sanctions regimes. The standard also includes model tokenization terms, board resolutions, and internal regulations for the issuer. It also offers guidance on the functionalities a smart contract (i.e. the computer code generating the tokens recorded on the ledger) must have to be suitable for the tokenization of securities.

CMTA's standard for the tokenization of debt securities closely resembles the standard the association published in 2021 for the tokenization of equity securities issued by Swiss companies. It however diverges on certain points that reflect key differences between equity and debt instruments. A notable characteristic of debt tokenization is that – unlike equity securities whose terms are largely prescribed by law – debt instruments are typically governed by detailed contractual terms. CMTA's standard provides guidance on how to ensure that those terms are reliably determinable by all holders.

Also, the terms of a debt instrument may be governed by a law other than Swiss law, particularly if the issuer is a non-Swiss entity, and may grant jurisdiction to foreign courts. Where permitted by the issuer's governing law, Swiss law (Article 145a of the Federal Act on Private International Law) allows for such non-Swiss financial instruments to be tokenized under Swiss law. In these cases, the tokenization terms must distinguish between matters relating to the instruments themselves – which are governed by foreign law and subject to the jurisdiction of foreign courts – and matters concerning the tokenization process, which fall under Swiss law. The standard includes a model jurisdiction clause that can be incorporated into the tokenization terms. This model clause contemplates a general jurisdiction of the courts in the issuer's home country, which must nevertheless apply Swiss law to issues related to tokenization, and an alternative jurisdiction of Swiss courts for matters that relate exclusively to the tokenization process.

Regulatory aspects and significance for the Swiss capital markets

Since tokenization is the legal equivalent of issuing physical certificates for securities, it is not a regulated activity in Switzerland. Tokenizing securities does not – by itself – require any authorization or license from a regulatory authority. Unlike in some other jurisdictions, deploying a smart contract on the blockchain on behalf of an issuer is also not considered a regulated activity in Switzerland. Similarly, the professional custody of tokenized securities is not regulated as such. However, this activity constitutes financial intermediation and is therefore subject to Swiss anti-money laundering (AML) regulations. As a result, professional custodians must affiliate with a recognized self-regulatory organization (SRO) and comply with Swiss AML rules if the activity is conducted in or from Switzerland.

By contrast, operating a trading platform for tokenized securities is a regulated activity. Depending on its structure and functionality, such a platform may require a stock exchange license, a Multilateral Trading Facility (MTF) license, or a securities house license (specifically for operating an organized trading facility). Alternatively, a platform can be authorized in Switzerland as a DLT-based trading facility – a hybrid regulatory framework that combines custody, trading, and settlement of digital assets. Additionally, the activity of settling transactions involving tokenized securities may trigger licensing requirements as a central securities depository or authorization as a DLT-based trading platform.

In March 2025, FINMA granted its first license for a DLT-based trading facility. The relevant firm – BX Digital, a Swiss subsidiary of Börse Stuttgart – uses a public blockchain (Ethereum) for settlement. In this context, CMTA's tokenization standards represents an additional building block in the establishment of blockchain-based market infrastructures.

For more information on this subject, you can download CMTA's Standard for the tokenization of debt instruments using distributed ledger technology.

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Legal Note: The information contained in this Smart Insight is of general nature and does not constitute legal advice.