The rise of Cryptocurrencies and Blockchain in Switzerland and Beyond
Over the past year, the number of cryptocurrency and blockchain startups and researchers establishing base in Switzerland has doubled, with the country being described as a cryptocurrency hub thanks to its crypto-friendly ecosystem that is advantageous for businesses conducting such activity.
Businesses including crypto brokerage firms and blockchain startups are at a huge advantage in Switzerland as there are currently no registration or taxation policies in place, while the process for setting up business in the country is relatively simple. Further, there are no specific registration requirements for ICO and crypto businesses at present, while there are no specific regulations or guidelines with regards to taxation of ICO or cryptocurrency businesses.
The Swiss canton of Zug has been dubbed “Crypto Valley” with 200-300 virtual currency entities opening in the region in recent years. However, cryptocurrency and bitcoin companies have expanded well beyond Zug and into much of the surrounding territories of Switzerland and Liechtenstein.
A report carried out by CV VC found that there are more than 600 crypto-investments and blockchain-related companies in the regions, with more than 3000 professionals employed to fill a wide range of job positions including blockchain software developers, ICO advisors, ICO solicitors, PHP developers and crypto traders, amongst many others. The top 50 ventures featured in the report also possess a combined market capital of around $44 billion, with five of those startups valued at more than $1 billion each.
Countless ICO and crypto businesses are capitalising on this dominant global sector and the country is going to great lengths to remain at the forefront of blockchain innovation, primarily by helping blockchain businesses to access the traditional finance system and make it easier for them to open corporate bank accounts.
That being said, competition will always remain rife with the main offshore rivals including Liechtenstein, Gibraltar and the Cayman Islands. In order to remain an attractive destination for business formation, Switzerland must ensure that crypto and blockchain companies can access traditional banking services in order to carry out day-to-day financing activities.
Cryptocurrencies, blockchain and ICOs are bringing immense opportunities to Switzerland but factors such as data protection and regulation must be addressed if the country is to remain a key player in the global cryptocurrency stratosphere.
While there are currently no plans to further develop Switzerland’s regulatory framework, the Swiss Federal Department of Finance has established a working group whose role is to evaluate the legal framework for the financial use of blockchain technology, and to identify and implement any course of action if needed. Finally, the Swiss authorities are planning a corporate tax reform, which will be highly advantageous for businesses engaged in ICO and cryptocurrency related activities.
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