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Bitcoin Suisse Applies for a Banking License in Switzerland

The company has approached regulators for two licenses: banking and securities dealing, a press release confirmed.

Swiss crypto broker Bitcoin Suisse has applied for banking and securities dealer licenses from Switzerland’s finance regulator, the company confirmed in a press release on July 16. 

Bitcoin Suisse, which forms part of the country’s Crypto Valley Association, said it had submitted requests to the Swiss Financial Markets Supervision Authority (FINMA).

The reason, it said, was in order to adapt to a rapidly-changing regulatory landscape vis-a-vis cryptocurrencies, even in Switzerland, which is known for its proactive stance on the industry.

“These licenses would allow Bitcoin Suisse to further expand its offering with regulated services and products, thereby strengthening its position as a leading provider of crypto financial services,” the press release stated. 

In preparation for the license going ahead, the company also revealed it had deposited 45 million Swiss francs ($45.7 million) with an unnamed local institution, “as collateral for a default bank guarantee, securing client fiat deposits and pooled crypto deposits.”

That figure would soon reach 55 million francs ($55.8 million), the press release added. 

In applying for bank status, Bitcoin Suisse joins a number of other hopefuls from the cryptocurrency space, these including Crypto Valley’s own Bank Seba and blockchain startup Signum. 

Last month, fellow Swiss entity Dukascopy announced it would launch and begin testing  Ethereum-based stablecoins pegged to currencies including the franc and the euro.

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Safe Space: A Guide to Special Economic Zones for Crypto, From China to Switzerland

Russia may join a list of countries with an offshore crypto zone with a plan to build its own on an island.

Last week, Russian officials revealed plans to build a major financial center on an island in the Far East, which would cater to cryptocurrencies, among other things.

Notably, the creation of special economic zones for crypto has been an enduring idea both in Russia — similar proposals have been previously made in regard to Crimea, a territory that is claimed by Russia — and the rest of the world. Here’s the list of countries that have been establishing special hubs for cryptocurrencies and blockchain on their soil.

Special Economic Zones for Crypto

Bolshoi Ussuriyskiy offshore crypto zone and similar concepts in Russia

The news that an offshore destination for cryptocurrencies might appear on a Bolshoi Ussuriysky island was revealed at the St. Petersburg International Economic Forum, an annual Russian business event for the economic sector.

The concept was mentioned by Leonid Petukhov, the head of the Far East Investment and Export Agency, during an interview. According to Petukhov, the island could become an offshore destination for cryptocurrencies, crypto exchanges and forex markets. He told TASS, a Russian news media:

“We want to make a large financial center there. Metaphorically speaking, that would involve cryptocurrencies, cryptocurrency exchanges, timber trading platforms — so like domestic offshore, in a good sense. What we did in Kaliningrad.”

Petukhov was most likely referring to Oktyabrsky Island in the Kaliningrad region, which, along with Russky Island in Vladivostok, reportedly became offshore economic zones in July 2018. Foreign companies registering in those clusters become exempt from certain levies — for instance, they don’t have to pay taxes on profits received by way of dividends. However, neither of those zones currently involve any cryptocurrency-related benefits.

Bolshoy Ussuriysky is a sedimentary island at the confluence of the Ussuri and Amur rivers, and lies exactly on the border between Russia and China. It had been a long-disputed territory for more than a century, but in 2004, the island was officially divided between Russian and China, and half of Bolshoi Ussuriysky (170 square kilometres) was moved to China’s jurisdiction.

According to Meduza, a Latvia-based online newspaper, the Russia-owned part of Bolshoy Ussuriysky has been mostly abandoned in the past years, especially after a 2013 flood, and lacks many elements of essential infrastructure like paved roads. Further, the report mentions that there have been “at least a dozen different proposals to develop Russia’s side of Bolshoy Ussuriysky Island” presented since the mid-2000s, none of which have been implemented.

Meanwhile, the acceptance of crypto and blockchain in Russia has been significantly mixed.

Officials have been struggling to outline a specific framework for cryptocurrencies for the past few years, although President Vladimir Putin had previously announced a deadline for July 2018. At the start of June 2019, the country’s parliament said it was considering imposing fines on crypto mining by the end of the month, while Sberbank, Russia’s largest bank, officially announced it was dropping its plan to develop crypto-related services.

The idea presented for the island of Bolshoi Ussuriysky is not new for Russia, however. Last year, authorities in the Crimean peninsula, a territory claimed by the country, considered creating a blockchain cluster in the form of a crypto investment fund in order to attract more tech businesses to the area.

The cluster would be located within the special economic zones (SEZ) in Crimea and its largest city Sevastopol, according to a local official, who outlined the concept in November 2018. There has been no public update regarding the cluster since.

Switzerland

Zug, a small Swiss town with a population of 30,000, is home to one of the oldest and well-known hubs for cryptocurrency and blockchain companies, and is commonly referred to as the “Crypto Valley.” Although there is no official confirmation for this, the term was supposedly coined by Ethereum (ETH) co-founder Mihai Alisie, who worked on the project with the rest of the Ethereum team.

The path for Zug to become the Crypto Valley started back in 2016, when the municipality allowed residents to pay their fees in bitcoin. “With Bitcoin, we’re sending a message: We in Zug want to get out in front of future technologies,” local mayor Dolfi Müller told German news outlet DW at the time.

Unlike with the other places mentioned on this list, the move was merely symbolic — the payments were even limited to the equivalent of 200 Swiss francs ($201) — and did not suggest the creation of a special economic zone, per se. Nevertheless, it drew the attention of various fintech companies, who chose to settle in Zug and neighboring Baar around the time it was introduced. An effective tax policy is also believed to be a major factor.

In December 2018, Zug was ranked the fastest-growing tech community in Europe based on a comparison of year-on-year growth of attendees to tech-related meetup events per European city. According to the IFZ Fintech Study 2018, more than half of the new fintech ventures based in Switzerland in 2017 operated in the blockchain and crypto space. The majority of these companies were reportedly founded in Zug.

The general attitude toward blockchain from local officials seems positive. In March 2019, the Swiss Federal Council had initiated a consultation period on the adaptation of federal law for blockchain development, which was supposed to finish in June. The goal of the consultation was to improve legal certainty over blockchain applications in order to build a basis for a regulatory framework for the industry in Switzerland, particularly in the financial sector.

Days after the consultation period commenced, the president of the Swiss Confederation, Ueli Maurer, stressed that establishing regulation for the blockchain sector should be fast and clear. Symbolically, Maurer made his remarks at the Crypto Valley Summit in Zug.

The Philippines

The Philippines seems to be at the front of the race for a crypto hub in Asia, having unveiled arguably the most detailed plan in the region so far.

In 2018, the Cagayan Special Economic Zone — a state-owned corporation responsible for the development of the 54,000-hectare Cagayan Special Economic Zone and Freeport (CSEZFP) located in the northern Philippines — announced it was going to establish a fintech hub with the goal of creating an Asian “Silicon Valley.”

The hub, also known as the Crypto Valley of Asia (CVA) will be developed by the Cagayan Economic Zone Authority (CEZA) in collaboration with private property developer Northern Star Gaming & Resorts Inc. The ultimate goal for the CVA is to stimulate the local economy and allow more Filipinos to pursue careers in technology.

More specifically, local firms are expected to generate employment in exchange for the tax breaks they will receive. CEZA will also require companies to invest at least $1 million over two years and pay up to $100,000 in licence fees.

As CEZA’s CEO, Raul L. Lambino, put it in the official press release:

“CEZA welcomes the launch of the Crypto Valley of Asia as a critical infrastructure that will serve to attract more foreign investors and global fintech players to CEZA and the Philippines. The Philippines can become one of the major off-shoring destinations for Fintech and blockchain related work,”

Asia-focused English-language publication Nikkei Review describes CVA as “a $100 million blockchain hub that aims to mimic Zug in Switzerland.” According to the media outlet, the Cagayan Economic Zone Authority has already secured participation from at least 25 tech companies, while the hub will include an internet data center, self-sustaining power production infrastructure and a “blockchain academy” training facility.

CEZA has already began issuing provisional licenses to cryptocurrency exchanges and other crypto-related businesses in the economic zone.

As for the rest of the country, the government seems to be keeping a close eye on cryptocurrencies. In February of this year, the Philippines introduced a new set of rules governing the issuance and acquisition of utility and security tokens.

The Bangko Sentral ng Pilipinas (BSP) — the country’s central bank — has required domestic crypto exchanges to register as remittance and transfer companies and implement specific safeguards — covering Anti-Money Laundering (AML), Combating the Financing of Terrism (CFT), risk management and consumer protection — since February 2017.

In June 2019, BSP warned against the potential use of cryptocurrencies in terrorism financing and stressed that they will continue to closely monitor their use in the country.

Georgia

In 2014, the government of Georgia, a post-soviet republic located in the Caucasus region, offered preferential treatment to Bitfury, a major cryptocurrency mining outlet currently headquartered in the Netherlands. Specifically, as per The New York Times report, the Georgian government sold 45 acres for just $1 to Bitfury so that the company could establish its operation. In addition, an investment fund that belongs to a former prime minister also granted the startup a $10 million loan.

Once Bitfury set up shop, Georgia created “free economic zones” in which mining activities and electricity aren’t taxed. As a result, the country has had the fastest-growing electricity consumption per capita in all of Eastern Europe and Central Asia since 2009, with 10-15% of electricity devoted specifically to crypto mining, as per the World Bank report.

Bitfury has built two facilities within the free economic zone in Georgia: a 20 megawatt data center in Gori and a 40 megawatt mining facility in Tbilisi. The latter reportedly had a daily revenue of $250,000–$400,000 as of May 2018. At some point, the farm was reportedly sold to Bitfury’s Chinese stakeholder, but within a few months, the mining outlet repurchased it back.

Regulation-wise, there is no specific framework for cryptocurrencies in Georgia at the moment.

However, the government has been leaning toward a general blockchain-friendly, low-regulation stance, as Cointelegraph previously reported. In 2017, Georgia became the first nation to implement distributed ledger technology for securing and validating government records.

China

In April 2017, Chinese President Xi Jinping announced plans to build Xiongan as a special economic zone. Notably, blockchain was presented as one of the cornerstones of the plan — it would be used in the areas of community services, government affairs and business, as the officials declared.

However, bitcoin and other cryptocurrencies are missing from the plan. That is explained by the general trend of the Chinese government, which has been cracking down on digital assets for the past few years, but facilitating and encouraging the growth of their underlying technology.

The South China Morning Post reports that the urban development project will “redirect” around 6.7 million people and could bring in 2.4 trillion yuan ($348 billion) over the next decade.

At this point, Xiongan’s local government has already partnered with numerous Chinese tech firms — including Tencent, Ant Financial and Qihoo 360 — to incentivize blockchain companies to come to the city. Notably, foreign companies have also been approached. In July 2018, China’s Xiongan New Area government signed a memorandum of understanding with the New York-based blockchain company ConsenSys to bring blockchain technology to the “smart city.” Joseph Lubin, the founder of ConsenSys, said at the time:

“As one of our first major projects in the People’s Republic of China, we are excited to help define the many ‘use cases’ that could benefit from the trust infrastructure enabled by ethereum technology,”

Belarus

Belarus has gone further than any other post-Soviet republic and set up its own fully fledged version of Silicon Valley in a bid to become “a tech country.”

Thus, as a result of signing the Decree on the Development of Digital Economy, the Belarussian government effectively legalized businesses that deal with blockchain or any other activity related to cryptocurrencies and moved them to a special economic hub called the High-Tech Park (HTP).

More specifically, as per the decree, mining and exchange operations are not treated as “business activities” in Belarus and are not subject to being taxed. According to Clause 2.2 of the decree, Dec. 21, 2017, No 8:

“Natural persons are entitled to possess tokens and, having regard to specific features established by this Decree, to perform the following operations: mining, storing of tokens in virtual wallets, exchange of tokens for other tokens, their acquisition, alienation for Belarusian rubles, foreign currency, electronic money, and also to donate and bequeath tokens.”

In addition, the declaration of income from cryptocurrency operations was declared optional until Jan. 1, 2023.

However, as Cointelegraph reported last year, the Belarussian experiment turned out to be quite feeble, at least in its infancy. As of March 2018, a few months into the new decree, “virtually no one in the territory of the Republic of Belarus has yet been engaged in the exchange of cryptocurrency or the conduct of so-called ICO,” according to what a member of the Advisory Council of the Belarusian Blockchain Association told Cointelegraph at the time, suggesting that the HTP was not in high demand.

Moreover, it is still unclear how Belarus would deal with ICO authorization and audit of cryptocurrency balances, among other things.

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Facebook Launches Swiss-Based Startup to Develop Its Crypto

The social media heavyweight has recently set up a company in Switzerland to focus on its stablecoin and blockchain-based payment system

Citing a Swiss news website, Handelszeitung, Reuters reports that Mark Zuckerberg’s social media has chosen the local jurisdiction for making its plans regarding its USD-pegged coin come true.

Choosing the most crypto-friendly country

Facebook is dead serious about its plans to give users a new digital coin and has chosen the best place for creating it. The company is registered in Geneva and the Crypto Valley located in Zug is also close by. As of last year, Switzerland has adopted a friendly approach towards crypto, ICOs and cryptocurrency startups.

As per the news report, Facebook has launched Libra Networks to produce the payments system on DLT which was announced earlier. The secretive project of the company is already known under the title Libra Project.

Libra Networks runs under the ownership of Facebook Global Holdings II, Ireland-based. Apart from cryptocurrencies, the startup will be dealing with other areas closely related to crypto – DLT, analytics, data processing and identity management.

Facebook has not commented on the situation yet.

Investors are looking forward to ‘Facebook Coin’

Previously, Ethereum World News reported that many of US citizens are willing to invest in ‘Facebook Coin’, rather than Bitcoin, and use it on the social media platform and other platforms owned by Facebook, such as, WhatsApp and Instagram.

LendEDU conducted a survey on a thousand adult US citizens, eager to study their trust to the crypto area and the previously announced ‘FB Coin’ in particular.

The report shows that just 7 percent of
respondents have ever invested in crypto, e.g., Bitcoin, XRP, Ethereum. However,
18 percent are looking forward to buying ‘Facebook Coin’ as soon as it is
launched and open for usage.

Facebook works hard on its crypto product

Recently, Mark Zuckerberg’s giant took two former Coinbase top management employees on its payroll. One of them, Mikheil Moucharrafie, left Coinbase for Facebook in April this year.

The other, Jeff Cartwright, has been with Facebook since March, after working for almost five years for the major crypto exchange.

As reported by Ethereum World News previously, Facebook is in negotiations with a great number of large VC firms in order to raise $1 bln to back its cryptocurrency.

‘Facebook Coin’ has also provoked certain concerns of US authorities, who have recently published an open letter to Mark Zuckerberg, demanding that the company discloses more details about the Libra Project.

The post Facebook Launches Swiss-Based Startup to Develop Its Crypto appeared first on Ethereum World News.

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PwC’s Strategy&: Security Token Offerings ‘are Not Fundamentally Different From ICOs’

PwC’s global consulting subsidiary Strategy& has published an ICO and STO report in collaboration with Swiss Crypto Valley.

Security token offerings (STO) are becoming more popular, relative to initial coin offerings (ICO), according to a new report by Big Four firm PwC’s global consulting subsidiary Strategy&. Released on March 8, the firm’s forth ICO and STO report was developed in collaboration with the Swiss Crypto Valley Association.

According to the joint report, STOs “are not fundamentally different from ICOs.” The document states that STOs are “a more mature and regulated form” of fundraising, noting — given the definition of a security — that the tokens sold in an STO can provide investors with various financial rights.

STOs, the report claims, also combine a number of ICO features, such as low entry barriers for investors, as well as traditional venture capital and private equity fundraising characteristics, such as Know Your Customer (KYC) and Anti-money laundering (AML) regulations.

With that, the overall number of both STOs and ICOs has declined significantly in the second half of 2018, which was allegedly caused by the ongoing crypto winter, as well as by the shift from the ICO to the STO model, the report says.

Out of total of about $19.7 billion raised by 1,132 ICOs and STOs in 2018, two projects accounted for over $5.8 billion of the volume, the report notes. Those companies are the Eos Foundation, which carried out the largest ICO in history, reportedly raking in over $4 billion in June 2018. The second ICO giant is Telegram messenger, which raised an also impressive $1.7 billion in two private ICO rounds for its TON crypto platform.

ICO/STO development from 2013 to 2018. Source: Crypto Valley

ICO/STO development from 2013 to 2018. Source: Crypto Valley

The report from Strategy& and Crypto Valley also noted the trend of the tokenization of commodities such as gold and oil, as well as the tokenization of intellectual property.

The United States Securities and Exchange Commission has long reminded investors that many tokens sold in ICOs are in fact securities under U.S. law, and thus should be registered with the agency.

Recently, Cointelegraph has reported that while ICO market is smaller that it was in 2018, it is still larger that it was at the beginning of 2017.

Earlier in February, ICO rating service ICObench reported that ICOs in Q4 2018 raised 25 percent less than in Q3, while the total number of ICOs increased.

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Crypto Valley Association ‘Looking Into’ Improper Conduct by Member Platform Blue Trading

The trading platform has said it is closing permanently following a major software problem that reportedly lost funds.

Swiss cryptocurrency industry organization the Crypto Valley Association (CVA) is investigating allegations of foul play by one of its members after the platform closed down last month, CVA officials confirmed in a statement on Feb. 28.

According to its website at press time, Blue Trading, also known as BlueTrading, shuttered investment services after what it described as a software malfunction, discovered Feb. 21, caused widespread losses of funds.

At the same time, the platform’s owner, BluVenture Group Ltd., has faced considerable controversy over its legitimacy claims from international finance bodies.

“The CVA has been approached by various persons regarding the Blue Trading platform,” the association’s statement reads, continuing:

“We are currently looking into allegations expressed publicly against Blue Trading of inappropriate business conduct, based on the CVA’s General Code of Conduct.”

BluVenture Group faced expulsion from Hong Kong brokerage standards body the Financial Commission in September last year.

A statement issued at the time warned:

“Effective September 26, 2018, BluVenture Group Ltd and its affiliated brands BlueBroker and BlueTrading were expelled from membership with the Financial Commission due to repeated violations and failures to adhere to membership Rules and Guidelines.”

The Hong Kong move was preceded by a warning from the United Kingdom’s finance regulator the Financial Conduct Authority, which accused BluVenture Group of operating financial services without permission.

According to BlueTrading, users currently have until March 15 to withdraw funds from their accounts before the service permanently closes.

“We sincerely apologize for this very disappointing event and wish we could continue operating but it is not possible at this time,” the message on the platform’s website explains.

The CVA, centered in the Swiss town of Zug, consists of a growing number of blockchain and cryptocurrency startups and seeks to build a supportive regulatory environment for the technologies with the local and national government.

In December, the initiative was ranked as the fastest-growing tech hub in Europe.

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Building With the Enemy: It’s the Crypto Network That Makes Us Strong

Ian Simpson is chairman of communications at the Crypto Valley Association, an organization that supports the Swiss blockchain sector. The following is an exclusive contribution to CoinDesk’s 2018 Year in Review.  “Grin and bear it,” they say. And in the current crypto market conditions, many people, on all sides, are “bearing” it, most without any grin […]

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Swiss Blockchain Company Gains Regulator Approval, Seeks Banking License in 2019

Swiss blockchain startup Smart Valor has won approval from the country’s regulators to operate in the local financial market, Reuters reported September 5.

Smart Valor will be regulated by the local Financial Services Standards Association (VQF) rather than the national regulatory agency, the Financial Market Supervisory Authority (FINMA). The VQF is authorized by FINMA to check anti-money laundering (AML) compliance.

Status as a regulator-approved financial intermediary will purportedly give Smart Valor more credibility, as it will be actively supervised for AML compliance. However, it was not clear whether other blockchain-related companies in the country have won approval as financial intermediaries. Both FINMA and VQF declined to comment.

According to Reuters, Smart Valor plans to launch an online platform for alternative investments, including cryptocurrencies, in the fourth quarter of 2018. The company is also applying for a banking license, which the firm hopes will allow it to offer securities investments in the first half of 2019.  

Smart Valor founder Olga Feldmeier told Reuters that tokenization is going to change the way people approach investing:

“Tokenization transforms the way people own things, improves liquidity, and makes these investment opportunities accessible to a broader audience of investors.”

Switzerland is among several countries who are actively adjusting and creating legislation to welcome blockchain projects. As Cointelegraph previously reported, the country is home to a world-famous Crypto Valley located in the canton of Zug.

In early July, local companies aided the Zug government in trialing blockchain technology in local online voting system. The non-binding trial vote involved 72 out of 240 citizens with access to the online voting system.

Smart Valor was founded in 2017 by Olga Feldmeier who had previously worked for China-based Bitcoin wallet Xapo. Feldmeier founded the firm in an effort to disrupt the Swiss banking system.

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Daniel Diemers From PwC Strategy& Switzerland: Adoption of New Technologies Requires More Education

Blockchain technology is predicted to have a great future in Switzerland. What does this mean for the labor market, what does the Swiss government think about this technology and what does blockchain need in order to be adopted by the people? Cointelegraph discussed these questions with expert Dr. Daniel Diemers at BlockShow in Berlin.

Daniel Diemers worked as an entrepreneur for several years in the field of internet-based early warning systems. He has been a partner at PwC Strategy& since 2005, where he advises banks and regulators in Europe and the Middle East on digitalization, fintech and blockchain. Daniel Diemers is also a co-founder and board member of the Swiss Finance + Technology Association (Swiss Fintech) and a fintech investor himself.

About PwC and blockchain

Cointelegraph: As early as mid-May, there were reports that PwC’s Strategy& was working on blockchain in the logistics sphere. What does PwC’s work with this new technology look like?

Daniel Diemers: We have our own global blockchain team. For example, I’m head of the blockchain department in Europe and the Middle East. We have many employees who are well familiar with the subject and we are not only working on the use of blockchain in logistics but are also on implementing blockchain in the banking and agricultural sectors. I am a strategist, and I have to clarify various questions regarding blockchain: coding, protocol, cybersecurity, taxes, accounting and how blockchain can be used in this sphere.

About using blockchain and its impact on the job market

CT: In your opinion, what fields need blockchain technology the most?

DD: That’s a very good question. We are discussing banking, insurance and ICOs — as well as financial services — a lot. I see a particularly huge need for this technology right here. But if you look at how the blockchain will develop and where it will be used, according to statistics, you will see a lot of services and applications outside of the financial world. For example, the energy sector, agriculture, healthcare, but also logistics [and the] Internet of Things (IoT).

We expect that the blockchain will be used in 80 percent of the industry. Administration, voting, banking, insurance — these are the first steps.

CT: Many politicians and heads of major financial institutions are critical of cryptocurrencies, but have positive things to say about blockchain technology. Commerzbank reportedly already has a ”DLT Lab.“ What do you think is the reason for that?

DD: That was the case last year. I believe that their opinions are slowly changing. Now there are more and more banks that are also dealing with cryptocurrencies, having their first projects. There are also banks, now, that accept cryptocurrencies as a means of payment. I am sure we are in a very exciting process right now. The entire financial services industry, banks and insurance companies will be dealing with cryptocurrencies.

CT: Are you not worried that blockchain might replace many jobs in the financial sphere?

DD: I don’t understand this fear, yet. Mostly we are discussing artificial intelligence and robotics. Blockchain can have a similar impact, of course, because it can actually increase productivity in an efficient way. Some things I had to do before — such as bringing different data systems together — I may not have to do with the help of blockchain anymore. But I don’t feel like blockchain is a so-called job killer. But if we look at this technology in connection with artificial intelligence then yes, then a lot of jobs could disappear.

CT:  Are you saying that blockchain and artificial intelligence could replace you?

DD: I’d do some reflecting here. I don’t want to think that these two technologies and robots can replace me — and I don’t recommend thinking that way. I think the next five to 10 years will be very exciting and we’re going to have to expect many changes. You don’t have to be afraid of such changes — and when people are a little afraid, it’s just a human reaction to new things. Like, I hear about cryptocurrencies for the first time, I don’t like them, so Bitcoin is not good. But soon that will change. Now, the next generation is coming up. Young people growing up with smartphones. They are like, my bank is my smartphone. They don’t even get to see any plastic cards — they’re shopping online. And they think cryptocurrencies are normal or even cool.

About “Crypto Valley” and Swiss e-franc

CT: How popular is crypto in Switzerland? When will the Swiss people be using cryptocurrencies as a means of payment?

DD: Crypto Valley in Switzerland has not existed for long — it’s less than two years [old], but it has grown enormously. Two or three years ago, there were perhaps 10-15 companies, while today, there are around 300-400 companies that already have a branch in the Swiss Crypto Valley — and all of them are involved in the crypto sphere: ICOs, blockchain startups. The Swiss people are also aware of these developments because there are a lot of media reports about them, people read and talk about them. The Swiss government is also trying hard to understand it.

The Swiss Federal Council has established a blockchain task force to promote its adoption in the country. I was also allowed to have a seat there, which was so exciting because we were 35-40 experts from all over Switzerland, from different fields and with different experiences. Together we pondered questions about what our citizens are interested in, what is positive and negative, what the state yet has to do and, yes, whether the state has to do anything at all.

I believe that in most European countries, compared to Switzerland, the general population has not yet dealt with crypto and blockchain. If we just randomly select 10 people on the streets of Berlin and ask them about blockchain, ICOs and cryptocurrencies, we’d find that they are not very familiar with the topic. Adoption of new technologies requires more education.

CT: Switzerland has plans to launch its own state cryptocurrency. Do you think this is a good idea?

DD: Correction: that has not yet been decided. We have a very decentralized and democratic governance in Switzerland, and all new ideas will be welcomed and discussed.

Right now, we are discussing whether we want a national cryptocurrency — e-franc or crypto-franc — in Parliament. There are also different people from the crypto community who deal with this matter and give us [the] first ideas — and we discuss it all together. I think that’s very good about Switzerland.

I don’t think that’s a bad idea. When I’m travelling, I’m using local currency in other countries. In some cities, I’m using Bitcoin and other cryptocurrencies. Why, then, shouldn’t I use a cryptocurrency, perhaps issued by the Swiss government, which is legally supported by the government and the Swiss National Bank?

CT: And what are your thoughts on the new FINMA ICO regulations? Do they actually provide more clarity?

DD: Yes, absolutely. The government, investors and even entrepreneurs who want to launch ICOs in our country need some regulatory certainty.

Nobody wants to invest money in an ICO, lose it all after six months, and the court not knowing how to deal with scams like these under existing laws.

A healthy regulation is necessary, and Swiss investors consider these FINMA rules to be very important. This is different in Asia — some countries do not want to work with ICOs, so they simply ban them.

About three things that blockchain needs

CT: You mentioned that Swiss media reports are positive when it comes to blockchain and cryptocurrencies. In your opinion, do people tend to overestimate their knowledge of the opportunities and risks of cryptocurrencies as an investment due to intensive reporting?

DD: Yes, I think so. First of all, you need quality journalism and very good journalists who go in-depth and who do not randomly throw in superficial topics. Secondly, there is also a need for good, reasonable regulation that offers certain protective measures and educates people about the risks. You shouldn’t just say that this and that is bad and speculative, but also give advice on how to invest in which currencies [and] in the best way possible. And lastly, there is a need for a lot more information and education: children should have to learn what blockchain is and about its advantages and disadvantages at school.

There is a lack of educational opportunities for adults and there are only few people who can really teach this topic. I believe there is a great challenge ahead of us, and all teachers have to think of good ways to explain what blockchain and cryptocurrencies are and how to deal with them reasonably.

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Crypto Valley’s Zug to Run Switzerland’s First Blockchain-Based Municipal Vote

The Swiss city of Zug will conduct a blockchain-powered trial municipal vote this summer, local media outlet Swissinfo.ch reported June 8. The event, which is scheduled to take place between June 25 and July 1, will reportedly be Switzerland’s first municipal vote using blockchain.

According to the report, the upcoming trial vote will implement the city’s digital ID (eID) system that was launched in November 2017. The system will allow citizens to vote via their mobile devices.

Apart from voting on minor municipal matters, citizens will also be asked if blockchain-based eID system should be used for referendum votes in the future. Since the upcoming vote is a trial, its results will be non-binding for city authorities, Swissinfo.ch reports.

Having established “Crypto Valley”,  a global hub for crypto and blockchain development, Zug has become one of the centers of “world’s leading ecosystems for crypto, blockchain, and distributed ledger technologies.” In 2016, Zug launched an initiative accepting Bitcoin (BTC) as payment for certain municipality services.

Thanks to the presence of “Crypto Valley” and the country’s tax-free policy for crypto investors, Switzerland is reportedly the number one most blockchain-friendly country in Europe.

On June 6, the privately held Hypothekarbank Lenzburg bank, became the first bank in Switzerland to provide business accounts to blockchain and cryptocurrency companies.

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Swiss Bank Becomes First in Country to Offer Business Accounts to Crypto Companies

Hypothekarbank Lenzburg has become the first bank in Switzerland to provide business accounts to blockchain and cryptocurrency companies, Cointelegraph auf Deutsch reported June 6.

While Falcon Private Bank has provided crypto asset management services since last year, Hypothekarbank Lenzburg CEO Marianne Wildi confirmed that they are first bank in the country to open company accounts for blockchain and crypto-related fintech companies. Wildi said:

“As a bank that sets itself up technologically and pursues a cooperative strategy in the field of fintech, it is also a matter of credibility to work together with the young sector of crypto and blockchain companies in Switzerland”.

Wildi noted that she was aware of “the money laundering problem in the area of ​​crypto companies and Initial Coin Offerings (ICOs)”. The bank reportedly examined the relevant risk and compliance issues “very precisely,” in addition to informing the Swiss Financial Market Supervisory Authority (FINMA) before deciding to cooperate with crypto startups.

According to Wildi, the Hypothekarbank Lenzburg is reportedly very selective in accepting new customers, and recently has taken on only two companies from the crypto industry. Before accepting a new client, the bank performs a rigorous due diligence process.

The Swiss canton of Zug has become a global hub for the cryptocurrency industry, taking on the monicker “Crypto Valley.” Despite the influx of crypto business, restrictive bank policies toward crypto companies forced firms to look abroad for banking services.

Bank Frick of Lichtenstein, for example, sees no compliance issues or risks to their reputation in doing business with Swiss crypto companies. In February, Bank Frick introduced direct crypto investment and cold storage services for Bitcoin, Bitcoin Cash, Litecoin, Ripple and Ethereum.

The Principality of Liechtenstein has become a major financial hub in Europe and aims to play a pivotal role in the fintech industry as well. In March, the government introduced comprehensive blockchain legislation, regulating blockchain business models and underlying blockchain systems.