The wealthy country, infamously known as the tax haven, has started to prepare for the new era of the blockchain. Johann Schneider-Ammann, economist minister of Switzerland, told Financial Times that the country wants “to be the crypto-nation”.
With strict anti-money laundering rules, incumbent banks have refused many new blockchain start-ups. Thus, they turned to other banks in Zug. In 2016, the city was the first to accept Bitcoin payments for government services. Since then, Zug, the smallest but richest town has become another global technology centre after Silicon Valley in the US and Zhong Guan Cun in Beijing, attracting thousands of blockchain industry start-ups and Fortune 500 companies.
Creation of a “Silicon Valley” in the era of Blockchain
Founded in March 2017, Crypto Valley Association is a new organisation focused on blockchain to promote the research and development of blockchain technology. Over the past few years, Crypto Valley Association has become a hub for blockchain experts, investors and enthusiasts around the world to exchange information and ideas.
The rapid development of the ICO is experiencing increasingly stringent regulation at every corner of the globe, and the Swiss government has taken a different approach
In this context, the Swiss government has further established the Crypto Valley Association, aiming to create an independent, government-supported, globally leading blockchain and cryptocurrency technology ecosystem.
Developed and advancing banking industry
As the public’s interest in cryptocurrencies has grown, many Swiss have become holders of cryptocurrencies, and Swiss banks have accelerated the upgrading of financial products.
Swissquote is the second largest bank in the world and houses a variety of assets for the world’s wealthiest humans. It has launched a series of cryptocurrency trading services and products. Marc Bürki, CEO of Swissqoute, told CoinTelegraph, “The speed of cryptocurrency sweeping the world is faster than everyone expected. We are introducing safe and efficient cryptocurrency services and products on our platform, which makes it easier for users to invest in cryptocurrency.”
Other well-known banks in Switzerland, like Vontobel, jumped in the evolution by providing customers with cryptocurrency related financial services. In 2016, they were the first provider of Short Mini Futures of Bitcoin on Swiss Stock Exchange. With this opportunity, investors could speculate the declining value of the cryptocurrency.
Innovative regulatory environment
The number of cryptocurrency startups entering Switzerland has soared, the chart from the Financial Times shows that Switzerland topped the charts of digital coin offerings. This phenomenon is due to Switzerland’s enterprising ICO policies.
On February 16, 2018, Financial Market Supervisory Authority (FINMA) updated the ICO Regulatory; in the evaluation of ICO, FINMA will focus on the economic function and use of the token issued by the ICO organiser. Also, ICO organisers are required to provide essential information, including necessary information, project descriptions, token distribution, and transfer.
Overall, Switzerland’s regulatory policy on ICO is “relaxed”, and the innovation aspects of its policies are also setting precedents for other countries to follow. On the other hand, FINMA pioneered the way in which ICO projects were classified and regulated, they fully respect the diversity of current ICO projects and improve the efficiency of regulation. On the flipside, FINMA tightens the compliance of ICO projects by requesting essential information of the company to be provided: basic company profile, project descriptions, token distribution, and transfer. This would be beneficial to reduce the asymmetry of information ICO projects and facilitate the healthy development of compliance projects.
Implementing Blockchain in the electoral system
In addition to the developed banking industry, the Swiss have long been accustomed to voting to determine the matters of the state.
Today, Switzerland, which is governed by the referendum, has added blockchain technology to the referendum system. Zug’s Mayor, Dolfi Muller, has recently proved the use of a blockchain-based voting platform through successful testing. The blockchain-based election system is useful compared to other electronic voting systems because it can significantly reduce the probability of system tampering.
Switzerland is an expert in maintaining a balance between innovation, policy, privacy and security. This could be the explanation for Switzerland’s success in creating a Crypto Valley and taking the lead in the blockchain era.