Mass adoption of cryptocurrencies is a dream for many crypto investors. In fact, there is a growing number of countries banning cryptocurrencies as they try to control capital outflow and stop money laundering and other illicit activities. And this isn’t surprising at all considering that the crypto market is still relatively young.
However, not all countries are against cryptocurrencies. Switzerland, for one, is fast becoming a hub for cryptocurrencies. In fact, it is considered an odd-fit for cryptocurrencies to be paired with its ultrasafe Swiss franc. But still, four of the ten largest initial coin offerings can now be seen in the country.
There are efforts by the country’s economic minister to expand the so-called Crypto Valley. And one of the possible reasons is the shrinking banking sector in Switzerland. The number of banks in Switzerland has fallen by 20% just in the last decade according to the numbers provided by Swiss Bankers Association.
What Makes Switzerland Ideal for Cryptocurrencies?
It isn’t actually surprising that Switzerland has become a hub of crypto startups considering the reality that it offers a great environment for such ventures. According to Ian Worral who started MyBit, a cryptocurrency investment startup, he mentioned that Switzerland “is the best from a tax, legal, and operational standpoint”.
MyBit was able to raise around $3 million via ICO just last summer. The goal of this investment platform is to fund Internet of Things devices such as that of self-driving automobiles.
Because of the reality that Switzerland is friendly towards crypto startups, Crypto Valley Labs and another location from housing just 15 last year to over 100 this year. According to Mathias Ruch who is the managing partner at Lakeside Partners, “I’m signing contracts on a daily basis”.
Recently, officials from Finma which is the Swiss financial regulator met with different industry representatives in order to showcase what makes Switzerland a great choice for crypto startups. According to Worral, the Swiss government has an approach of “Do your best, and if you mess up, we’ll work with you”.
But of course, there are still those that are worried about the potential risks of cryptocurrencies. The Swiss National Bank is skeptical regarding the possible risks associated with these cryptocurrencies. Large banks also echo the same sentiments. UBS Chief Executive Sergio Ermotti mentioned that “From our standpoint, until you are able to trace all of these transactions and subject them to strict rules on anti-money laundering, this is a huge risk”.
Other Countries Dabbling on Cryptos
There are different countries today that are opening their doors for blockchain technology. In fact, Iran is an example of this country. Though Iran’s Central Bank banned Bitcoin and other cryptocurrencies, a local cryptocurrency is being applied for testing.
Another notable country that entertained blockchain technology is Venezuela. Venezuela has been struggling economically mainly due to a number of reasons. One of which is dealing with sanctions imposed by the US. Cryptocurrencies for both Iran and Venezuela could help them circumvent existing sanctions.
Is Switzerland right after all with its approach to help cryptocurrency startups? Could this cause trouble for the country considering the associated risks within the crypto market?