Off late, Switzerland famously-known as a “Crypto Nation,” has been driving away crypto investors because of the stringent regulatory framework that was set up previously.
Switzerland which was once called “Crypto Nation” recently after setting up a more stringent regulatory framework has been driving away the ecosystem.
After dropping down to the sixth place in 2018 from the second place previously in a PwC country ranking the sum of initial coin offering (ICO)funds raised, the government has been making attempts to make a U-turn in the popularity by encouraging banks to accept cryptocurrency company accounts.
Following the published ICO guidelines in February 2018, Switzerland has been offshoring their rivals such as Liechtenstein, Gibraltar, the British Virgin Islands, and the Cayman Islands with its flourishing businesses in cryptocurrency
Erik Voorhees a renowned name finds the new regulation that defines three types of tokens (payments, utility, and asset) and also anti-money laundering compliance for payment tokens “pretty reasonable”
The truth is that majority of the cryptocurrency entrepreneurs have lost their interests in establishing themselves in the country. One of the wealthiest Swiss region Zug which is also known as “Crypto Valley” has received around 300 virtual currency entities in the recent years. The local government is concerned that the authorities may leave if their banking system is not made easier.
Heinz Tannler, Zug’s financial director in an interview with Reuters stated that “ All the banking relationships are going to Liechtenstein, that means hundreds of jobs are been created and every job is important”.
Since the announcement of the new legislation, Swiss Cryptocurrency businessmen have even gone onto request the Swiss National Bank (SNB) to ease their hardships on opening bank accounts
According to a report published by Reuters, back in the previous year, as many as 20 accounts of virtual currency firms were closed by Zuercher Kantonalbank (ZKB). It was also reported that out of the 20 banks in Switzerland only a few have authorized cash deposits equivalent of cryptocurrency raised by an ICO.
For an initial assessment, Hypothekarbank Lenzburg charges nearly 2,500 Swiss francs and ICO companies registering with Banca Zarattini have to complete know-your-customer (KYC) and anti-money laundering (AML) procedures.
The firm in charge of cryptocurrency related cases is FINMA, the financial watchdog of Switzerland.
After the roundtable between the central bank, the finance ministry, the Swiss Bankers Association (SBA) and the financial watchdog, together came up with a set of checks and conditions, which would allow banks to open accounts for cryptocurrency firms, which would, in turn, reduce the concerns of customers regarding ICO thefts or money laundering.
The main focal point of the meeting was to discuss new FINMA-approved guidelines for cryptocurrency companies by the end of the current year.