Switzerland Promises to Ease Rules for Fintech and Blockchain Startups

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While governments in the US (particularly the SEC) , China and Russia have all taken strict or uncertain regulatory positions toward digital currencies, Switzerland has welcomed the movement with open arms. 

During a meeting of the Swiss Federal Council on February 1st 2017, the Federal Council initiated a move towards amending the countries’ Banking Act and Banking Ordinance to ensure that barriers to market entry for Fintech firms are reduced and that the competitiveness of the Swiss financial centre is enhanced.

It was noted that due to the rapidly progressing digitisation in the Blockchain area,  business models will develop which are not yet conceivable today and the council promised to swiftly propose the necessary regulatory adjustments if required.

This is great news for Cryptovalley in Zug. Located just south of Zurich with a population of 120,000, Zug is one of the smallest of Switzerland’s 26 cantons and it has one of the country’s lowest tax rates, introduced in the 1940s as a way to lift itself out of poverty.

Cryptovalley in Zug is already famous as a laissez faire hub virtual currency firms. The 30-kilometer stretch of land from Zurich to Zug offers Blockchain startups progressive laws, a competitive hiring environment and low taxes a mix that has attracted many crypto entrepreneurs looking for a place to gain traction amid an uncertain international legal climate. 

When tax reforms and the end of banking secrecy posing a threat to its business model, the canton wants to reinvent itself as a “Crypto Valley” – and has now become a base for Blockchain start-ups such as Akasha International, Ethereum Foundation, Melonport AG, Modum.io, SingularDTV and many others.

And it’s a good place for Blockchain startups offering:

  • a “stable predictable, neutral political system” a culture of financial privacy
  • access to talent
  • low taxes
  • public-private support for entrepreneurs
  • the World Economic Forum’s listing of Switzerland as the most competitive nation in the world.

According to a report last year by  at Coindesk in June 2016, two members of the Swiss Parliament’s Federal Assembly proposed a total of three blockchain-related motions designed to make it easier for the financial sector to anticipate ramifications of blockchain technologies; “consolidate” Switzerland’s position as a blockchain leader; and make it easier for blockchain startups to hold customer funds without being classified as banks.

Swiss authorities and industry are behind Zug’s push into crypto finance, believing it will allow the financial sector to diversify as the demise of banking secrecy looms.

“If we don’t take part at the front of ‘fintech’, we don’t deserve our title as a global financial center,” Martin Hess of the Swiss Banking Association told Reuters. 

About Richard Kastelein

Founder, Publisher and Editor in Chief of industry leading online publication, Blockchain News and co-founder and director at Blockchain Partners in London/Amsterdam/NYC. Kastelein is also an advisor with a number Blockchain startups doing ICOs including Humaniq.co where hs is interim CMO, DECENT.ch, Inchain, Chronobank, eGaas and others. He is regarded as one of the top journalists by the Blockchain and fintech communities – as is evident by his entry in the Top 150 Fintech journalists online and in the top 10 of the Blockchain Top 100 List.

As a prominent keynote presenter, he has spoken on Blockchain at events in Gdansk, Amsterdam, Minsk, Dubai, Antwerp, Eindhoven, Bucharest, Nairobi, Tel Aviv, Manchester, Brussels, Barcelona etc, where he helped spread the cause for Blockchain technology and cryptocurrency and, consequently, has built a notable network in the scene.

He’s also a director of a Dutch foundation called The Hackitarians and has run innovation events in London, San Francisco, Berlin, Amsterdam and other cities around the world on topics such Blockchain, Health, Energy, Internet of Things, AI etc.

In 2013, the European Commission appointed him as an expert for overseeing financing for emerging startups as a part of the European Commission’s 90 billion euro Horizon 2020 project, created in Brussels to promote innovation as a driving force of job creation and business ventures across Europe. He has also worked as an external expert for Innovate UK since 2012, judging startups for the UK government.

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