With overwhelming support from the Swiss parliament, the country’s former finance minister Ulrich “Ueli” Maurer has started to serve as the President of the Swiss Confederation since January 1, which may allow the country to become friendlier toward crypto.
In the past several years, under the leadership of Maurer, Switzerland adopted practical crypto and fintech-related regulatory frameworks to facilitate the growth of emerging technologies and startups working to increase the awareness of blockchain technology.
How Maurer’s Presidency May Affect Local Crypto Sector
During his term as a finance minister of the Swiss Confederation, the government integrated several key policies that enabled startups in the cryptocurrency and blockchain sector to operate freely without regulatory hurdles.
In August 2018, Crypto Finance AG board member Marc Bernegger told Bitcoin.com in an interview that while the country has hundreds of cryptocurrency companies in Zug, only a small portion of the companies had bank accounts with local banks.
The entrepreneur said:
I understood from day one the impact that the technology was going to have. Back in the old days, hardly anybody in the traditional financial services industry was even hearing about Bitcoin. Nowadays, when it comes to cryptocurrencies, there is an understanding of financial services that reminds [me of] the old banking privacy. It isn’t about replicating that again, but I think Switzerland has a strong reputation and knowledge about protecting assets.
Recognizing that the refusal of banks to provide stable financial services to cryptocurrency startups may negatively affect the growth of the country’s local cryptocurrency sector, then finance minister Maurer established a meeting with Finma and the Swiss National Bank to find ways to provide cryptocurrency startups with banking services.
Following the meeting, many private banks including Maerki Baumann started to work with cryptocurrency-related startups given that companies are in compliance with existing financial regulations.
The forward-thinking approach in fintech and cryptocurrency regulation by Maurer eventually led Zug, the fintech capital of the region, to become the fastest growing city in technology.
An annual report released by Atomico, a London-based investment firm, revealed that in many areas including conferences, Zug has shown the highest year-on-year growth over any other European city.
The rapid growth of the fintech, finance, and cryptocurrency industries of Switzerland also allowed the country to compete with some of the largest economies in Europe in the volume of deals and investments in 2018.
“Italy, Norway and Switzerland have seen the significant expansion of deal volume in 2018, as investment activity in these relatively less mature countries continues to grow. The overall top 5 countries in Europe by total number of deals in 2018 remains the same as in 2017 with the UK, followed by France, Germany, Sweden and the Netherlands,” an Atomico report read.
Switzerland is in Tight Competition
Five months ago, Maurer engaged in a discussion with local financial authorities and financial institutions because he acknowledged the emergence of competitors in the fintech and cryptocurrency space, which could overshadow the efforts of Switzerland if companies move out of the region.
Since then, the competition in the global cryptocurrency sector has tightened, leaving cryptocurrency startups alternative choices outside of Switzerland.
Countries in the likes of Malta, Singapore, Hong Kong, South Korea, and Japan have adopted cryptocurrency-friendly policies with adequate Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations, in a similar manner as Switzerland.
In the months to come, as seen in the decision of the Swiss Stock Exchange, the country’s largest stock market, to list a cryptocurrency exchange-traded product (ETP), the country may continue to see increasing cryptocurrency and blockchain initiatives that could contribute to the improving liquidity and institutionalization of the asset class.