Switzerland intends to become a real “Crypto Nation”, but there is a small problem: the blockchain start-ups, for the most part, are almost completely cut off from traditional banking systems, since the Swiss banks themselves categorically refuse to process their accounts.
This is due to the fear of banks involved in possible criminal activities for money laundering, which can greatly affect their reputation among customers.
However, the situation may still change for the better, as the Swiss authorities are aimed at curbing this fast-growing industry, and also give new start-ups full access to banking services this month. The Swiss Ministry of Finance is working with the Swiss Bankers Association to remove a serious obstacle to the growing crypto industry, the Financial Times reported.
What is the problem?
The small picturesque town of Zug, located near Zurich, became a real home for 200 blockchain startups, which led Switzerland to the second place in terms of the number of ICO registered in the country, and the first place, naturally, remains for the United States.
Cryptocurrency fever caused a huge inflow of capital into the Swiss economy, bringing about $ 1.46 billion only in 2017, but banks are still afraid to contact this industry, as it is extremely vulnerable to hacker attacks, and traditionally, many ICOs are associated with fraud.
Swiss bankers do not want to communicate with such a shadow industry and facilitate the conduct of a priori suspicious transactions. Bankers are very much afraid that the anonymous nature of bitcoin, like a number of other cryptocurrencies, greatly facilitates the processes of money laundering and terrorism sponsorship.
Thus, the lack of banking support has become a real problem for the growing industry. Naturally, there are many ways to spend digital money, but they are still far from as common as traditional fiat currencies. This means that blockchain start-ups can not physically cash out the money earned during the ICO, and send them to the development of the business.
So, crypto companies, trying to find a way out of this situation, turn to banks in Liechtenstein, as well as to third-party services that provide banking services, but more often than not, they use the services of third parties. For example, Coinlab Capital entered into a deal with TokenPay, a payment platform in the blockchain, which is registered in the British Virgin Islands.
According to Guido Schmitz-Krummacher, an expert on the blockchain and former director of the Tezos company, by imposing a ban on the access of crypto startups to banking services, Switzerland simply killed a chicken that lay the golden eggs.
“Canton Zug has invested tremendous efforts to build a reputation for the” Crypto-currency Valley ” – a global “home” for the blockchain and industry enthusiasts.” If the bankers can not provide a competitive environment for the development of start-ups, the situation will take a negative turn” – the expert said.
“I can already see how the projects are beginning to massively choose Singapore, Malta and Gibraltar, simply because they are not allowed to start an account in Switzerland, adding to this the outflow of already registered projects inside the country, and only then we will see that this problem will get a huge resonance with politicians and bankers.”
Regulators ask for help
Despite the critical approach that global financial regulators have chosen, Switzerland intends to stand out against their background and support the developing industry.
The Minister of Economy, Johann Schneider-Ammann, shared his vision on how Switzerland could become a “Crypto Nation” back in January, while the Minister of Finance recently formed a whole department that will work together with the Association of Swiss Bankers (SBA), the central bank and a number of other organizations to achieve this goal.
The SBA plan to develop a set of rules and standards that will be applied to the ICO, which will greatly simplify the process of opening bank accounts by their creators, and also eliminate all risks for the banks themselves, that the activities of these projects will be illegal.
“Of course, companies need to apply rules that also significantly complicate the process of money laundering so that scammers can not find a way to conduct their business here.” I can understand the caution of banks and the fact that they adhere to the rule of “know your customer” as well as the desire to prevent illegal activities.
But experts say that the possibility of money laundering in a blockchain is much less than in any other financial sector, explains Ganz Tannler, CFO of Zug.
“Blockchain companies should have the same banking rights as any other organization, and if we do this, they will stop choosing countries where access to the banking system is much easier for them, for example the Liechtenstein.” Source: pravda.ru