Switzerland Boosts Its Crypto Credentials
Amid booming investor enthusiasm for cryptocurrencies, one country in particular has been making serious efforts to capitalize on the trend and build up a powerful domestic cryptocurrency industry — Switzerland.
The country has long boasted a robust financial services industry, and as of late, it's been trying to strengthen that reputation by becoming a hub for this new subsector, as investor money keeps pouring into cryptocurrencies and initial coin offerings (ICOs).
Now, Switzerland is ramping up its attractiveness for cryptocurrency players even further, as two new developments show:
- The Swiss government has set up a Blockchain Taskforce to establish a clear-cut framework for companies using the tech. Blockchain technology is the base on which most cryptocurrencies, most notably Bitcoin, are built. Led by the country's finance and economics and education ministers, the group will review blockchain guidelines that have been issued in partnership with the State Secretariat for International Financial Matters, a federal agency tasked with enforcing financial market policy. It will then create a framework that gives companies using blockchain technology or working specifically with cryptocurrencies freedom to innovate, while reducing risk in the sector. Given the gray area many other countries' legislation leaves blockchain and cryptocurrency players in, such clarity will likely make Switzerland even more attractive for these companies.
- A government-backed nonprofit has published a code of conduct for ICO conductors. Crypto Valley Association (CVA), a Swiss nonprofit tasked with bolstering Switzerland's blockchain and cryptocurrency industries, has published a code of conduct for companies issuing ICOs. Among other things, the document asks ICO operators to tell investors how money raised in a token sale will be used, how the token in question works, and what risks are associated, in language understandable to people with minimal tech savvy. The CVA places a lot of emphasis on investor protection, but the code's purpose is likely more pragmatic. Despite ICOs' wild popularity, frequent media reports of scams and bad governance around ICOs risk putting off more conventional investors. By trying to clean up the stable and increase transparency, the CVA is probably trying to make ICOs more appealing to a wider swathe of the public, likely to bring in more money through ICOs into the country.
Besides benefiting Switzerland, these initiatives could have more international advantages. If Switzerland now manages to bring some much-needed regulatory clarityand transparency to the booming but chaotic crypto space, the country's approach could become a model for regulators in other countries on how to oversee it. Given the difficultieswatchdogs elsewhere seem to be facing in regulating cryptocurrencies and ICOs — often resorting to reactionary or heavy-handed measures to control the space — such a blueprint would be welcomed.
This article first appeared on Business Insider UK.