One of the most important financial centers in the world, Switzerland, is undoubtedly one of the most dynamic countries in terms of cryptocurrencies. The country’s regulator, theSwiss Financial Market Supervisory Authority (FINMA), is extremely proactive in the sector and Switzerland intends to have a leading edge in crypto fintech. While other financial centers in the world prefer to wait or fail to provide a clear strategy on the regulation and adoption of cryptocurrencies, Switzerland has applied itself to giving precise directives on the subject: FINMA was the first regulator to publish clear guidelines on ICOs and token classifications. The demand for cryptocurrency investment services is therefore significant, both from retail and institutional investors.
Switzerland’s first steps in the crypto sector date back to 2018: the then Minister of Economy, Johann Schneider-Ammann, had declared that he wanted to make Switzerland “a crypto-nation”. Similarly, the Swiss Secretary for International Finance, Jörg Gasser, stressed the need to promote cryptocurrencies in compliance with existing financial standards. To achieve these goals, the country’s Department of Finance had launched a consultation on new general cryptocurrency regulations that would allow it to take advantage of blockchain technology without stifling innovation.
This consultation bore fruit in 2020: with the “Blockchain Act”, Bern had introduced a set of legislative texts to codify the way digital assets should be treated by the courts, especially when it comes to its particular aspects. such as proof of ownership and custody. It should be noted that Switzerland allows tokenized securities to have the same legal status as traditional assets. The amendments recognize tokenized securities as a new asset class, whose legal ownership rights are automatically transferred via the blockchain to each new investor.
In 2019, Switzerland was one of the first countries in the world to license two banks that were able to integrate cryptocurrencies into a wide range of services: Seba and Sygnum.
Like Silicon Valley, Switzerland has a hub made up of start-ups and fintechs specializing in the crypto sector, called “Crypto-valley”, whose cradle is in the canton of Zug. About 1100 blockchain and crypto companies existed in Switzerland in January and half of them are in Zug. Known for a relatively low level of capital taxation, Zug was also one of the first cantons in the country where taxes could be paid in Bitcoin (BTC) or Ethereum (ETH). For the implementation of this service, Zug has partnered with the crypto financial services company, Bitcoin Suisse: tax settlement with cryptocurrencies is available for companies and individuals up to an amount of CHF 100,000.
However, the canton of Zug is not the only one where cryptocurrencies are making their mark on the financial landscape. Indeed, since March, Bitcoin (BTC) and Tether (USDT) have been de facto legal tender in the city of Lugano. The city has indeed partnered with Tether to become the “Bitcoin Capital of Europe”, according to statements by Paolo ArdoinoChief Technology Officer (CTO) of Tether. As part of this initiative, Tether and Lugano have created an educational program called “Plan B summer shcool”, in partnership with theFranklin University of Switzerland and theUniversity of Svizzera Italiana to equip a new generation of workers with the skills needed to grow the digital asset space. The cantons of Chiasso and Citino also allow tax payments in Bitcoin.
Another milestone for the adoption of cryptocurrencies in Switzerland is the launch of a payment solution that allows nearly 85,000 merchants toaccept the cryptocurrency payments of their customers, following a partnership between the payment service Worldline and Bitcoin Switzerland. The service, dubbed WL Crypto Payments, allows merchants to accept Bitcoin (BTC) and Ethereum (ETH) as payment at point-of-sale but also in e-commerce via an app, Bitcoin Suisse said in a statement.
All these positive elements should not make us forget that Switzerland is one of the countries to apply particularly strict regulations for the crypto sector. FINMA stresses that blockchain-based business models cannot be allowed to circumvent the existing regulatory framework, especially with regard to anti-money laundering and anti-terrorist financing rules, where the “inherent anonymity “Technology presents increased risks. For the application of the “Travel Rule” of the Financial Action Task Force (FATF), the regulator explicitly refuses the transfer of funds to unregulated external wallet providers.
Many countries are trying to adopt policies that promote the expansion of the crypto sector. However, Switzerland has a major advantage over its international rivals: that of security and political stability. Moreover, with the uncertain situation of Portugal and a hardening of the position of Singapore, Switzerland remains as one of the most interesting alternatives for investors and crypto users, with El Salvador.
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