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Switzerland is an exciting
destination for cryptocurrency companies
Currently, the United States is experiencing an increasingly ambiguous regulatory landscape regarding cryptocurrencies and blockchain technology.
The SEC inspects central exchanges (CEXs) and banks associated with Web3 technology, but regulators' position on cryptocurrency-related products and services remains unclear.
On the other side
Europe is moving towards a more positive attitude towards new fintech.
Switzerland has emerged as a hub for cryptocurrency companies, with recent developments such as Cantonal Bank Zug providing cryptocurrency services
and extensive availability of cryptocurrency ATMs reinforcing the state's commitment to blockchain technology.
Switzerland's
attractiveness as a cryptocurrency hub
Switzerland's appeal as a cryptocurrency hub is linked to the overall regulation and spirit of innovation enjoyed by the state.
As the United States grapples with the complexities and challenges of
cryptocurrency classification and financial nature, Switzerland created
a well-regulated legal framework for cryptocurrencies in 2018.
Switzerland's progressive stance can become
a role model for other countries in several ways.
Clear and comprehensive laws and legislation provide a safe and stimulating legal framework for companies and investors in cryptocurrency.
This allows companies to operate
and innovate in a stable and encouraging legal environment.
Progressive organizational approach
The role of the Swiss Financial Market Supervisory Authority (FINMA)
was also a pillar of regulatory clarity, being the first to
approve the cryptocurrency fund in accordance with Swiss regulations.
This level of
clarity has made Switzerland an attractive destination
for cryptocurrency companies that can know exactly
where they are when you set up a store in the country.
Compared to the United States
regulatory ambiguity often served as a deterrent to cryptocurrency companies.
The lack of a clear framework has led to
what some call "Process Choke Point 2.0 effectively degrading
the environment for cryptocurrency institutions.
On the other hand
Switzerland provides regulatory clarity and cryptocurrency
friendly banks such as SEBA and Cygnum
which provides basic services such as tax data, coin storage and deposit insurance.
Benefits of
Switzerland's clear regulations
Lack of regulatory clarity often creates a significant
gap between paper and digital currencies
This generates division and confusion between companies
investors and consumers alike.
However, with clear regulations, paper currencies and cryptocurrencies can coexist in a symbiotic relationship, as some regions of Switzerland already show.
Canton Zug Bank aims to bridge this gap by adopting
more cryptocurrency service offerings.
PostFinance, the country's fifth largest financial services company
has also begun to give its users access to cryptocurrencies.
BBVA launched the "Blockchain to go"
initiative earlier this year, which provides the knowledge and education needed for businesses and people to enter this field with greater confidence and security.
These initiatives have created fertile ground for innovation, attracted more than 960 cryptocurrency start-ups in the country and created jobs for more than 5,000 people.
This type of enabling environment attracts
investors and traditional financial institutions.
The clarity of the regulation provided by FINMA gives these entities confidence to invest in and cooperate with cryptocurrency companies
knowing that they operate within a well-defined legal framework.
When it comes to taxes
Switzerland's policies are much more appropriate compared to countries like the United States where cryptocurrency transactions can result in a capital gains tax.
Cryptocurrencies are treated as assets, and only professional trading activities are subject to income tax, making them an attractive destination for long-term investors.
Some argue that Switzerland's cryptocurrency
friendly attitude could make it a haven for illegal activities
But this ignores the strict regulations on your customer's knowledge (KYC) and anti-money laundering (AML) that companies must abide by under Swiss law.
A blueprint
for governance and education
Switzerland's clear and progressive regulatory approach provides a blueprint for how countries can promote innovation while ensuring security
and compliance for their citizens.
It creates a win-win scenario for traditional banks
start-ups
institutional investors, and consumers
setting a standard that the rest of the world would do well to follow.
As digital
currencies become more widespread
regulations such as those in force in Switzerland may show other countries a cooperative path forward in these new technologies.
Even beyond cryptocurrency governance, countries must look to explore the economic benefits of digital assets such as clarity and job creation, embracing start-ups and financial diversification.