Switzerland: Global Hub for Crypto
Shutterstock/Iakov Kalinin
Main page Analytics, Regulations, Cryptocurrency
Hot topic
Nov. 29, 2018

The world’s first cryptocurrency exchange-traded product (ETP) to track multiple cryptocurrencies has been launched on Switzerland’s SIX Swiss Exchange.

Based on the Amun HODL5 index, it tracks four top cryptocurrencies by market capitalization: bitcoin, ethereum, ripple, and litecoin.

First Crypto ETF Ready, SEC Next?

Switzerland & Crypto

Switzerland is one of the first countries to have shown a positive attitude toward bitcoin. There, cryptocurrency regulation provides decent conditions and support for investments, ICOs, and developments.

Switzerland has adopted a remarkably progressive stance toward cryptocurrency regulations. Crypto exchanges in the countries are legal and regulated by the Swiss Federal Tax Administration (SFTA).

Cryptocurrencies are considered to be assets, are subject to the Swiss wealth tax and must be declared on annual tax returns.

According to the Swiss Federal Department of Finance, Switzerland attaches great significance to the integrity of the financial system but sees enormous innovative potential in blockchain technology, including financial services.

The country is thus striving to guarantee integrity, stability, and innovation in one step.

With the blockchain/ICO working group created in January 2018, the Federal Department of Finance (FDF), together with the Swiss Financial Market Supervisory Authority (FINMA) and the Federal Office of Justice (FOJ), in cooperation with the sector, created the prerequisites for examining the legal framework and identifying any action that may be needed.

As a location for significant developments in the blockchain and ICO areas, Switzerland is cautiously pursuing the goal of becoming a blockchain and fintech nation in international terms.

EZYcount: Making Accounting User-friendly With Blockchain

Switzerland as a cryptocurrency hub

While crypto-related business in Switzerland is tiny compared with its traditional banking sector, it has grown rapidly and employs hundreds of people, according to Reuters.

Over 500 blockchain startups have settled in and around Zurich and Zug. The wealthy Swiss canton of Zug has even been dubbed “Crypto Valle.” However, the leadership of the region fears they may leave if the government does not take steps to give them access to the banking system.

“All their banking relationships are going to Liechtenstein,” Zug’s finance director Heinz Taennler told Reuters.

Switzerland: Global Hub for Crypto

Therefore, Switzerland has recently taken steps to help blockchain companies access the traditional financial system by making it easier for them to open corporate bank accounts.

Faced with an exodus of cryptocurrency projects from the country, the Swiss Bankers Association (SBA) in September issued guidelines to banks who may want to do business with the startups.

The guidelines are based on the principle that anti-money laundering (AML) and anti-terrorism regulation, like any other cross-cutting regulation, also applies to blockchain/ICOs for all financial intermediaries involved.

On the one hand, the guidelines deal with blockchain specific elements within the Know Your Customer (KYC) process, on the other hand, they include concrete expectations for the issuers of tokens.

The guidelines differentiate between companies with general points of contact to blockchain and companies with an additional connection to cryptocurrencies, as well as the issuance of tokens (ICO).

When issuing tokens, the guide further distinguishes between financing via cryptocurrencies and financing through fiat currencies.

Swiss startup to launch cryptocurrency bank

Switzerland-based cryptocurrency startup SEBA Crypto AG has secured $100 million as an investment from some local and foreign retail and institutional investors to fund a fully regulated cryptocurrency bank.

Switzerland: Global Hub for Crypto

It is seeking a banking and securities dealer license to manage cryptocurrency trading and investments for banks and qualified investors.

It also aims to provide corporate financing, including advising on initial coin offerings, and other cryptocurrency and banking services to traditional corporate clients and cryptocurrency groups.

“SEBA wants to bridge the gap between traditional banking and the new world of crypto,” CEBA CEO Guido Buehler said.

Swiss crypto startup obtains Islamic finance certification

Switzerland-based financial technology firm X8 AG has obtained certification from Islamic scholars for its digital currency, with plans to expand its business in the Middle East, according to the report by Reuters.

X8 AG is among several companies expanding into Sharia-compliant finance to tap into the rapidly growing crypto and blockchain industries in the Middle East.

The company hopes its ethereum-based cryptocurrency, which is fully backed by a basket of eight fiat currencies and gold, can address such concerns, said X8 director and co-founder Francesca Greco.

Undoubtedly, Switzerland is an important global hub for crypto and blockchain. The country’s largest city, Zurich, set up its first bitcoin ATM four years ago, while the Swiss national rail company has since 2016 provided the possibility of purchasing the virtual currency at over 1,000 distributors across the country.

The city of Zug has accepted Bitcoin payments for council services since 2016, according to AFP. The southern Italian-speaking Swiss town of Chiasso, which is attempting to compete with Zug as a “CryptoPolis,” has decided to accept bitcoin payments for some taxes.

Read also:
Please describe the error