Blockchain in Switzerland - Legal Foundations for the Blockchain Industry

in crypto •  21 days ago

Preamble

When I think of Switzerland, only one phrase comes to my mind: "Tax Haven". When I talk about Blockchain I can only think of "Economic Freedom". But placing "Switzerland" and "Blockchain" in the same sentence, exploded my brain.

It's the perfect recipe, what we all dream of. Although I do not know to what extent it is beneficial for the Blockchain image. Since the fact that a nation with a tax regime where tax evasion is favored and that provides a total exemption or a very significant reduction in the payment of the main taxes, has always been a controversial and controversial issue, due to the fact that that in most cases it is considered an act of public immorality to want to hide the true amounts of money that is possessed and immediately associate that fact with an illicit activity.

Putting aside all this unfavorable scenario, the advantages become evident. Especially when we think that the government of that nation is taking measures to develop an entire legal framework that supports the implementation of Blockchain technology from the simplest commercial transactions to the payment of taxes.

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They Are Really Very Friendly and Positive Towards this Technology

There are currently two districts in Switzerland that have taken the adoption of this technology very seriously. In the city of Zug, a few kilometers from Zurich, is "Crypto Valley", where emerging companies and developers that operate and innovate in the world of blockchain and cryptography technologies have settled. There is also the city of Chiasso, in which in the last months and with the support of its mayor, 8 startups have chosen it to carry out their business and more negotiations are being carried out with other companies from Europe. The executive also affirms that he will consider the possibility of participating as a founding partner in the formation of a new non-profit foundation based in Chiasso, in which some of the leading exponents of this disruptive technology will participate.

The Swiss stock exchange also added to the cryptographic adoption with the creation of a Stock Exchange Exchange Product (ETP) that includes five cryptoactives (Bitcoin, VRP, Ether, Bitcoin cash (ABC) and Litecoin).

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Approach of The Swiss Government Towards Cryptography and Blockchain Technology

The Mayor of Zug, Dolfi Müller gave a signal of support to "Crypto Valley" when he declared the first open sale of Ether in 2014 free of taxes. In 2016, this city became the first city in the world to accept bitcoin as a means of payment of some public services, and currently offers its inhabitants the possibility of requesting an "electronic identity", based on blockchain technology.

The Swiss Government announced in 2016 licenses for techno-financial companies, but with limited requirements for emerging companies.

Recently I had the opportunity to read a publication of @ulqu3, where I proposed the implementation of STOs against the obvious disadvantages of ICOs without control (You can read his full work here).
Making an appointment of his work we can read:

"The lack of regulation is a defining factor of cryptocurrency. After all, a major tenet of cryptocurrency is DECENTRALIZATION. How then can a currency be decentralized if it still has to go through an authority? Compromise may be good, but it negates the entire point of the movement."

Well, a court in Switzerland ruled the liquidation of a company that promoted the creation of farms for the cryptocurrency mining using green electricity for breach of the guidelines offered to its investors during the ICO. This decision set a precedent in terms of the formal liquidation of a company involved in an ICO, especially in a country like Switzerland, which is characterized by being crypto-friendly.

It seems to me excellent that the authorities take part in this kind of eventualities where investors are often left helpless due to the lack of a legal framework in the matter of cryptoactives.

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Switzerland Establishes the Legal Foundations for the Blockchain Industry

Governments around the world are facing a reality in which the available tools need to be updated in order to provide effective answers. Wars, terrorism, natural catastrophes, have always been the cause of world organization and consensus. But now they are presented with a new scenario: The Blockchain Technology. Specifically, ICOs (Initial Coin Offerings) have been placed at the center of the governmental agenda throughout and across the globe.

Each government reacts according to the criteria of its governors. For example, China adopted a total ban on ICOs and cryptocurrency exchanges.

Other governments choose to be more progressive and open to innovation. They recognize that they are facing something different that needs legislation in agreement and they assume the commitment to work for that.

This is how Switzerland chose the second option. But not with the intention of creating a new legal framework that allows the management of cryptoactive operations, but adapting its current legislation to incorporate elements that involve blockchain technology.

I think it's the smartest decision.

When we see the exponential increase in investment figures in recent years in Switzerland, everything points to the cryptoactive and blockchain.

The initiatives that are already underway in this country in terms of investment are very diverse, ranging from banks that accept financial resources from the exchange of cryptoactives, the commercialization of coffee, tourism, the electric power industry, universities that accept payment in cryptocurrencies. The levels of adoption are unimaginable.

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Final Findings

There are several cities in the world that are moving towards the adoption of blockchain technology and the exchange of cryptoactives. Some with more advances than others. Perhaps due to the high level of legal precedents, more decisive decisions are not taken. But Switzerland has proven for many reasons, to be at the forefront of adoption.


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There are many cases that prove it. It is in Switzerland that a whole city received the news from its authorities of the creation of a registry for the digital identity service in the region based on blockchain and cryptographically protected. It is in Switzerland that a well-known operator of online banking services offers its customers a digital certificate to market Bitcoin, based on Artificial Intelligence. That allows their clients with the support of an automatic learning algorithm to make predictions regarding short-term performance, based on the interpretation of indicators.

For this and much more, I believe that Switzerland should be considered as an example to follow by the so-called "world powers" and direct actions that facilitate the lives of its citizens in the near future. As much as they resist, the adoption of blockchain technology will be inevitable.

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Interesting links for more information:
http://www.swissinfo.ch
https://cryptovalley.swiss/

Please follow me in twitter: @juanmolina2021 (https://twitter.com/JuanMolina2021)

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