Why March Was Big for Blockchain in Switzerland
Switzerland’s blockchain sector has seen promising announcements over the last weeks. The public and the private sector are setting the course for a digital future.
“Blockchain applications will explode in the next few years, and Switzerland is one of the leading developers of blockchain technology and its applications,” said Swiss Finance Minister Ueli Maurer in 2018.
And indeed, Switzerland’s blockchain-friendly policies have attracted numerous startups and established corporations. The number of blockchain companies in the so-called “Crypto Valley” — Switzerland’s Blockchain Silicon Valley in the Canton of Zug — is already encompassing more than 750 companies and over 3300 employees.
Like neighboring Liechtenstein, Switzerland is seeking the top spot in international blockchain development. And while the “Crypto Winter” has also had an impact in the Crypto Valley and somewhat slowed down the pace, Switzerland has gained momentum again over the last weeks.
Swiss parliament votes in favor of regulations
On 20th March, Switzerland’s parliament has called for the government to enforce existing financial markets regulations in digital assets trading. Members of the parliament have expressed their concerns that criminals could use digital currencies for money laundering, fraud, and extortion.
As fraud cases involving digital currencies are difficult to prosecute, the government wants to put digital asset exchanges under the same level of oversight as fiat exchanges. Thus, digital exchanges shall get the same treatment as financial institutions. They will be subject to the full load of financial markets regulations and will have to report to the Swiss Financial Market Supervisory Authority (FINMA).
That’s a reasonable step. As unregulated digital platforms are on the rise in Switzerland, the market needs clear regulations and strict enforcement of rules to “drain the swamp” and strengthen investor confidence.
Leading exchanges to launch regulated digital trading platforms
While it’s the government’s responsibility to introduce regulations that allow for a fair and prosperous digital market, it’s up to private businesses to develop the ecosystem, infrastructure, and business models.
Switzerland’s leading regulated stock exchange SIX, is working on a fully-integrated digital exchange. The company had already announced the launch of “SDX” back in October 2018. The platform was planned to go live in the first half of 2019.
On 11th March, Deutsche Boerse, Germany’s leading stock exchange, announced its plans to join the party. The firm has teamed up with Switzerland’s largest telecom provider Swisscom and fintech firm Sygnum, to launch a “trusted digital asset ecosystem” in Switzerland. Will Frankfurt beat Zurich to the punch? We shall see, but competition is good for the marketplace.
Julius Baer and SEBA team up to launch blockchain-bank
Apart from the exchange market, Switzerland’s banking sector is also stepping up its digital game. Crypto banking firm SEBA has recently teamed up with Julius Baer, a leading Swiss private bank, to offer banking services to Switzerland’s blockchain industry.
The firm is currently applying for a Swiss banking license and has raised $103 million. As Swiss banks have so far been reluctant to offer banking services to blockchain companies, SEBA could make a significant difference in the market.
The company says it will offer the full range of transaction banking and custody services, including secure storage and investment protection, trading between digital and traditional currencies, wealth management products and services, management of market and liquidity risks, professional ICO advisory and other corporate finance services.
Switzerland’s largest online retailer accepts digital currencies
On 19th March, Switzerland’s largest online retailer Digitech Galaxus has begun to accept digital currencies as a payment method. Customers who spend at least CHF 200 can pay in either Bitcoin, Bitcoin Cash, Ether, Ripple, Binance Coin, Litecoin, Tron NEO, or OmiseGO. The Danish company Coinifywill facilitate the transaction by converting each digital payment to fiat in real time.
While it might not be new that an online retailer offers customers to pay in digital currencies, Digitech Galaxus is the first corporate giant to provide such services in Switzerland. The firm has generated a turnover of nearly CHF 1bn last year. Hence, this is not a local electronics store trying to be innovative.
Outlook: Switzerland lays the foundations for digital growth
To sum it up: The government is enforcing financial markets regulations in the digital sector. Two leading exchanges are going to launch regulated digital trading platforms within this year. A leading bank and a startup are going to offer traditional banking services to the blockchain sector, and the leading Swiss online retailer is now offering customers to pay for goods and services using digital currencies.
2019 is going to be a big year for the Swiss blockchain sector. Both, government and businesses are laying the foundations and creating the infrastructure for a regulated digital industry. From this point forward, the sky is the limit.