Liberalization of Banking Access to Swiss Cryptocurrency Companies on the Horizon
Cryptocurrency companies in Switzerland might soon be able to take advantage of the conventional banking, said Heinz Tännler, head of Swiss Zug canton’s Financial Directorate, in an interview with Financial Times said on July 2, 2018.
Conventional banks vs. Crypto Companies
Switzerland has recently been named one of the crypto-friendly nations, along with Malta, Singapore, Gibraltar, etc. Moreover, its government has shown specific interest in this field, expressing its support for the crypto industry at the Blockchain Leadership Summit in Zurich in March 2018. Swiss Stock Exchange Chairman, Romeo Lacher, said in February that the creation of a blockchain-based “e-franc,” would further add to the country’s crypto-friendly reputation.
However, Switzerland still seems to be missing out on a lot of great opportunities that the crypto industry brings. The reason? It’s the lack of regulation in the banking system. To be specific, conventional banks have so far refused to deal with the accounts of crypto startups or the so-called unicorns.
Alain Kunz, CEO at Coinlab Capital, stated:
“On one hand, the government declares Switzerland a crypto nation and wants to become a business hub for blockchain technology. On the other hand, the banks make life difficult for the blockchain and crypto start-ups to obtain banking relationships — essentially killing the emerging businesses.”
Unfortunately, due to this situation, crypto companies in Zug have been forced to turn to other countries for help. One of them is Liechtenstein. Some of them have taken a different approach. Namely, Coinlab Capital partnered up with TokenPay, a blockchain-based payment platform registered in the British Virgin Islands which has banking operations. Coinlab Capital has signed to become TokenPay’s asset management branch.
The canton of Zug is a region of Switzerland that’s known as “Crypto Valley,” the nickname was given to it by Mihai Alisie, the co-founder of Ethereum Foundation headquartered in Zug. Zug is the home base to many other fintech enterprises such as Shapeshift. Why is Zug so famous among them? The answer is simple. The canton of Zug, along with its namesake capital city, aims to drive innovation and offer possibilities that other cities and countries might not.
“We knew that crypto was a very new thing and various regulators might view it in different ways. We wanted to find an environment where we thought it would generally be friendly. We identified Zug, and Switzerland in general, as a place that was open to this type of innovation in this space and we thought it was a good place to set up shop,” the Shapeshift COO, only identified as Jon, told Business Insider.
Zug is a small lake town about an hour outside of Zurich by train with a population of around 30,000. Traditionally, the people of Zug worked in agriculture and heavy industry, but it has lately become a home for pharmaceutical and medical companies such as Johnson & Johnson. The city is very open to crypto industry, and you can even use bitcoin to pay for municipal services.