Is Crypto Currency the new USP of Switzerland?
Switzerland is one of the few countries that has acknowledged the growing interest in crypto currencies and the blockchain technology that powers them. FinTechs seek to revolutionize the financial system in making it securer, transparent, faster, and cheaper. They might have found their startup paradise in Switzerland. Especially startups of the crypto currency space can find a working and nourishing environment in Switzerland’s “Crypto Valley” in Zug.
Within two years the city evolved from a conservative not-too-well-known town into a global Crypto capital via its clever strategic location marketing. It managed to draw over 20 bitcoin asset managers, brokers, and digital currency exchanges into town and continues to attract specialized firms and service providers. It has already attracted dozens of leading cryptographic companies and organizations, including Bitcoin Suisse, ConsenSys, Ethereum, Monetas, ShapeShift, Tezos, and Xapo.
Zug is not necessarily the first place you think of when you consider setting up a company. A few reasons in favor of doing so include taxation, regulation, and the community.
- The canton of Zug is among the ones with Switzerland’s lowest local corporate tax rates, namely, as low as 12% (including federal tax).
- Finma, the Swiss Financial Market Supervisory Authority, introduced crypto-friendly regulations and thus lowered the entry barrier for numerous foreign providers, brokers, trading platforms and stock exchanges to set up their companies in Zug.
- After only two years, numerous crypto experts settled in Zug and built a dynamic and including crypto community – an ideal setting for new entrants.
- The crypto currency bitcoin has become an accepted payment for services by the Resident’s Registration Office of Zug – showing the maturity of its development.
As a result, also Swiss banks can benefit from the recent trend: As crypto currencies and blockchain are based on security mechanisms, which allow complete transparency about transactions and volumes, when they simultaneously secure the identity of individuals and institutions, banks can finally escape the decade-long assault on bank secrecy. Private banks could use the blockchain to secure their customer data, so they comply with the tax transparency on the one hand, and can make critical information, that could be misused, inaccessible on the other.
What does this mean for Switzerland’s startup landscape?
The case of Zug is a perfect example for innovative business making gone right: the move a way from a conservative traditional business towards innovative collaboration will shape the future of every sector. Switzerland took the first step and adapted regulation accordingly for startups, managers, corporations, and the government to co-create modern forms of financial services. FinTech is a movement that brings all stakeholders closer together that strive for transparent, fast, customer-centric, and affordable solutions of the digital age.
Zurich may be the next FinTech Hub that the world lays eyes upon when it comes to state of the art products and services of the finance, insurance, or regulatory sector. F10 constantly brings financial experts, politicians, startups, FinTech enthusiasts and students together to enhance a sustainable FinTech environment of the 21st century. Together with 9 corporate partners, non-profit F10 motivates bright minds during the 3-day P1 Idea to Prototype weekend and supports global startups active in FinTech, RegTech and InsurTech during the 6-month P2 Prototype to Product Program starting a again in March 2018!