Switzerland Goes Blockchain
Switzerland has been ranked the most innovative country in the world for seven years in a row and the Swiss Federal Council—our executive branch—intends to have Switzerland remain a leading country in technology, innovation, and research and development in every field, including digitalization.
Blockchain technology has introduced a new data management model that offers promising opportunities. Its first real-life application with the cryptocurrency Bitcoin in 2009 allowed online payments to be sent directly from one person to another without the need for a financial institution to enforce trust, security and privacy.
The rise of Bitcoin and other cryptocurrencies has attracted much attention, but cryptocurrencies provide only one of the numerous cases of the use of blockchain technology. In general, there is a need to improve framework conditions for blockchain in the financial industry to realize the full potential for innovation and efficiency in the different sectors of the economy. There is also a need to continue the efforts to combat fraudulent or abusive uses of the technology. The authorities have started to take a greater interest in blockchain technology and Switzerland has placed itself as a world-leading location for blockchain companies with a good reputation and wants to further strengthen its position and strong ecosystem.
“Switzerland is THE Blockchain Nation and the Government is ready to support the developments with the relevant framework conditions. We are ready for the pace and the exchange with the private sector,” according to President of the Swiss Confederation Ueli Maurer.
Switzerland has been ranked the most innovative country in the world for seven years in a rowand the Swiss Federal Council—our executive branch—intends to have Switzerland remain a leading country in technology, innovation, and research and development in every field, including digitalization. Digitalization is a key driver of innovation, ongoing structural change, and the competitiveness of the Swiss national economy in the long term. Therefore in December 2018, the Federal Council adopted a report on the legal framework for blockchain in the financial sector.The report provided an extensive analysis of the current legal framework and clarified the need for action. Subsequently the Federal Council initiated a public consultation on adapting federal law to developments in blockchain technology. In that way, it wants to increase legal certainty, remove hurdles for blockchain-based applications and limit risks of misuse. The aim is to continue offering the best conditions for further solidifying Switzerland’s position as a leading, innovating and sustainable location for fintech and blockchain companies with a good reputation.
International cooperation is indispensable ]in this new area of technology, especially in relation to combating criminal activities such as money laundering and terrorist financing, which can occur in connection with crypto assets. Switzerland advocates for international coordination and discussion to clarify open questions and for stability risk monitoring in the context of crypto assets.
Due to the pro-business philosophy and the openness of its government, Switzerland has attracted many of the world’s leading companies. We will now take a closer look at a canton that plays a pioneering role in making Switzerland one of the fastest-growing tech communities in Europe.
The Swiss version of Silicon Valley is located in the Canton of Zug and is increasingly known as the blockchain and cryptocurrency hub of “Crypto Valley.”
Just as the city of Santa Clara, California, was practically renamed “Silicon Valley” when it became home to computing and the Internet, a Swiss town is now undergoing a similar transformation. The Swiss version of Silicon Valley is located in the Canton of Zug and is known as the blockchain and cryptocurrency hub of “Crypto Valley.” Ever since Bitcoin Suisse, a company focusing on crypto-financial services, put down its roots in Zug in 2013, the Swiss city located 20 miles south of Zurich has attracted various experts, investors and startups. The number of companies in the area working with blockchain technology has grown rapidly—today, some 750 blockchain or crypto companies are active in the region. The Valley’s proximity to universities has also contributed to the sector’s expansion in Switzerland.
However, it is important to note that the region of Zug not only serves as a host to all things blockchain, but that it has been experimenting with the new technologies at the local level. In 2016, Zug became the first city in the world to accept bitcoin payments for government purposes. Shortly afterward, the town introduced a blockchain-based digital ID to all of its 30,000 citizens. From that moment on, the owners of the so-called “e-ID” could use a mobile app to allow citizens digital access to various council services that gives users full control over their data. Since all personal data are encrypted and stored only on individual mobile phones, citizens are in full control of what information is released and to whom.
Since the city of Zug’s move to experiment with blockchain technology for their services, a number of local businesses have followed suit. A growing number of bitcoin payments are available for various products and services. Wine connoisseurs and customers of a wine shop in Zug were the first to be able to purchase their desired products using bitcoin. You can even get rid of a toothache at your local dentist’s office with bitcoins instead of Swiss francs!
Recent developments reveal that what is known as the Crypto Valley of Zug now stretches all across Switzerland: located just opposite the Swiss National Bank in Zurich, a new blockchain hub was launched in 2018 to bring different blockchain technology stakeholders together in an open and diverse environment. Many other Swiss cities such as Geneva and Nyon also contribute toward strengthening Switzerland’s role as a center of digital innovation on an international scale by providing ideal framework conditions for blockchain technology and companies. President of the Swiss Confederation Ueli Maurer is convinced that Switzerland can keep its top position as a “Blockchain Nation” since the Federal Council wants to keep forging ahead in that regard. When it comes to blockchain, Maurer confirmed that the Swiss authorities are “constantly looking for ways to stay two steps ahead.”