How Switzerland Reinvented Itself As Cryptocurrency Haven
Switzerland is enticing financial technology companies and startups to its already booming Crypto Valley by stripping down its regulations for services surrounding digital currencies and other financial services.
The growth of financial technology, and the associated acceptance of its affiliates – such as Bitcoin and other cryptocurrencies – from State governments, has seen varying degrees of regulation from countries.
However, it is Switzerland who is looking to lead the way in promoting the growth of this up-and-coming financial sector by applying a light touch to its rules and regulations for financial technology companies.
In a statement made by Finance Minister Ueli Maurer, promises were made about re-evaluating banking legislation with the intention to allow smaller companies in financial technology to sidestep the red tape that is usually attached to larger banks.
The proposed idea for minimizing regulations in Switzerland, while still keeping companies in line with legislation, is to set up so-called ‘sandboxes’ where startups and smaller companies can experiment and innovate within controlled conditions.
Companies that have accumulated less than $1 mln in third-party funds would be welcomed to test out their innovative financial technology ideas without the usual regulation surrounding finance and digital currency.
Banking licenses are also being re-evaluated to allow the companies that are coming in at under $1 mln to obtain licenses for those who offer deposits, but not lending.
Finally, the Swiss government also wants to encourage crowdfunding for these companies by raising the currently legislated time that donors can withdraw their donations from seven days to 60. This will offer much greater security of funding.
Good for fintech, good for Bitcoin
While these revised legislative changes are not aimed solely at digital currency, and Bitcoin for that matter, they encompass a large area of digital financial services that sweeps across cryptocurrencies at large.
Blockchain technology and its decentralized cryptocurrency is a booming market that is attracting more and more startups and innovators that are driving the growth of this financial technology.
No longer seen as purely a funding tool for dark web activities and the Silk Road, Bitcoin is attracting mainstream companies, especially in Switzerland, to grow Blockchain technology and digital currency services.
Bitcoin and businesses utilizing Blockchain technologies, other digital currencies and related services are now being classified along with recognized financial technologies. Mobile telephone payment services, automated wealth management advice, price comparison apps, tailored social media groups and crowdfunding systems all fall under the same regulatory umbrella now.
With governments tarring digital currencies with the same regulatory brush as they would innovative financial services, cryptocurrencies are being legitimized as well as encouraged to grow and innovate.
Rather than shunning the innovation of digital money, the Swiss have embraced it and cleared its path to cut into volatile central bank controlled fiat currency markets, while also reducing fees and improving security on the technology.