Swiss Crypto Sector Seeks to Remain Competitive as Projects Move ElsewhereJul 20, 2018, 9:01AM
Authorities are worried about losing hundreds of jobs to other crypto-friendly locations like Lichtenstein, Malta, and the Cayman Islands.
Switzerland, a European nation famous for its robust banking and financial services industry, is attempting to stem the tide of cryptocurrency projects leaving the country. The exodus follows the closing of two important banks that specialized in the sector, and authorities are worried about losing hundreds of jobs to other crypto-friendly locations like Lichtenstein, Malta, and the Cayman Islands. The Swiss are working on developing new rules to make the country more attractive to cryptocurrency investments.
Switzerland's Crypto Vally
The Swiss cryptocurrency sector is centered in Zug, a wealthy canton that is home to 200-300 blockchain-based projects. The concentration of blockchain projects has earned Zug the nickname 'crypto valley'. However, according to Heinz Taennler, the Canton's finance director, Switzerland's burgeoning crypto sector is struggling to function because it isn't well integrated into the banking system. He told Reuters,
All their banking relationships are going to Liechtenstein [...] These are hundreds of jobs that have been created, and every job is important.
Cryptocurrency startups have had difficulty opening bank accounts in Switzerland, and industry representatives have called upon the Swiss National Bank (SNB) and the Swiss financial market supervisor (FINMA) to intervene. The banks are waiting for the government to provide more guidance on the rules they must follow when operating in the cryptocurrency sector, and in the meantime, many have closed company accounts or left the sector altogether.
Switzerland Attempts to Solve the Problem
The Swiss authorities are working on new rules to give banks a framework for doing business with cryptocurrency companies. The country's finance ministry is also looking to develop a legal framework for blockchain technology and ICOs. The framework will be presented to the Swiss government by the end of the year. But in the meantime, Switzerland has fallen from second place to sixth place in a country ranking of ICO funds raised, according to June study from PWC.
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