There are countries that simply have a friendlier approach to cryptocurrencies than others. You have the likes of Malta that has opened its doors to many crypto companies. However, there are those countries that have a different approach and even banned crypto-related activities. A fine example, for instance, is China that has banned crypto activities completely.
However, it isn’t too late for countries to have a change of heart. In fact, South Korea, for instance, is already considering to lift the ban on ICOs as it adheres to the unified regulatory framework suggested by G20 countries.
Switzerland is also another country that hopes to take back the “crypto nation” title after it has imposed stringent regulatory rules for the industry.
In 2018, Switzerland dropped from second place all the way down to sixth place in PwC country ranking when it comes to the amount of funds raised by ICOs. However, by reversing their move to impose strict regulations, they are encouraging banks now to accept accounts of crypto and blockchain companies.
Companies Moving Out
Switzerland has lost a number of companies after publishing ICO guidelines in February 2018. Among rival territories that welcomed these companies included Liechtenstein, Gibraltar, Cayman Islands, and the British Virgin Islands. The rules that the country imposed defined tokens in three different ways. It can be a payment, utility, or an asset token. In addition to this classification, there is also the requirement for anti-money laundering compliance for the payment tokens.
This move has gained the support of some big names such as Eric Voorhees. He even considered this change in regulatory approach as “pretty reasonable”. However, it has created an effect among companies and lost interest in the country.
Role of FINMA
FINMA is the only entity that has been in charge of the issue. FINMA is a financial watchdog that aims to not only promote crypto innovation within the financial system, it is also in charge of protecting the investors from both fraud and the lack of transparency. The current anti-money laundering regulation that pertains to payment tokens can have banks liable for any kind of mistake that was committed by the company that initiated the ICO.
In May, there was a meeting between the finance ministry, the country’s central bank, FINMA, and Swiss Bankers Association. The goal is to have a new FINMA-approved regulation that will be directed towards the industry. The expected time for the new rule that pertains to cryptocurrencies.
Zug, which is a has been dubbed as “crypto valley” that has around 200 to 300 digital tokens think that they are going to leave if the government doesn’t do the necessary steps that would allow them to gain access to a banking system. Heinz Taennler who is the finance director for Zug mentioned that “All their banking relationships are going to Liechtenstein”. He also added that “these are hundreds of jobs that have been created, and every job is important”.
It is important to have a regulatory approach in the industry. However, it is a challenge for countries to not constrict companies that have ventured in the crypto industry.