Switzerland’s Crypto Valley Hits Banking Snag for Blockchain Businesses
Switzerland Hustling To Reclaim Its Crypto Friendly
Switzerland dropped from second place last year to sixth in 2018, in a PwC country ranking of the sum of initial coin offering (ICO) funds raised. The country renowned as a crypto-friendly nation due to its virtual currency hub, “crypto valley,” in Zug and its status as a tax-free haven for crypto investors, is losing popularity among crypto companies due to its more stringent regulatory framework.
Cryptocurrency projects based in Switzerland are feeling the heat from banks and financial service businesses, with two banking providers ceasing operations for crypto-businesses in recent months. This sent chills across cryptocurrency players in the region, who promptly relocated their businesses to Switzerland after significant regulations about the blockchain and cryptocurrency industries were introduced in 2017-18.
Zug is a home to a population of only 30,000 inhabitants in 2016 but has over 300 cryptocurrency businesses. However, Zug’s finance director Heinz Taennler expressed his concerns on the current state of banking support in the region, fearing the business may leave the famed region:
“All their banking relationships are going to Liechtenstein. These are hundreds of jobs that have been created, and every job is important.”
Thomas Moser, an alternate member of the governing board at the Swiss National Bank (SNB), said some cryptocurrency companies had asked the central to intervene. He said: “They raised concerns about problems with opening bank accounts, which was a worry for them, and asked for help.”
It is unclear how long it will take Switzerland to create new rules to reassure banks and encourage them to accept the accounts of cryptocurrency companies. Switzerland’s authorities have said they want to create conditions for the country to remain competitive but with no room for scams or financial crime.