In terms of crypto development, Switzerland is now standing at a crossroad. With very few exceptions, most of its banks have been refusing banking services to a growing number of startups residing in the country’s Crypto Valley and this is beginning to suffocate growth in the fintech sector.
Luckily, far-sighted policy makers and seasoned financiers have already pulled their sleeves up and are working to break the deadlock. One of them is Heinz Tännler, the finance director of the canton of Zug, home of the Swiss Crypto Valley. Speaking to the Financial Times, Tännler said he expected Swiss politicians and regulators to remove the obstacles in the coming months, which would allow crypto companies based in the country to operate with banks just like any other business.
Traditional financial institutions are increasingly under pressure to offer crypto startups regular services like bank accounts. According to Swissinfo, the bottleneck has become acute since the ICO craze brought $1.46 billion to Switzerland last year. A recent report by the Crypto Valley Association revealed that token sales through May this year have attracted nearly double the funds raised in 2017.
In January, economy minister Johann Schneider-Ammann shared a vision of Switzerland becoming a “Crypto Nation.” His colleague, finance minister Ueli Maurer went a step further by forming a working group with representatives of the Swiss Bankers Association (SBA), the financial regulator and the central bank in an attempt to find a solution. The SBA has also set up a taskforce and is planning to establish a set of standards for ICO startups in order to simplify the process of opening bank accounts.
“Both we as an association and the banks have an interest in business relations in this growth area. Banks see the potential that the blockchain technology offers for their industry and Switzerland as a financial and technology hub,” the SBA said in a written statement quoted by Swissinfo. Welcoming its actions, the Crypto Valley Association (CVA) said it anticipated “a progressive broadening of offerings by a number of Swiss banks.”
Very few legacy institutions in Switzerland have so far declared readiness to offer services to the 200 Zug-based blockchain and crypto firms. Among them are Neuchâtel Cantonal Bank and Neue Helvetische Bank. They were joined recently by Hypothekarbank Lenzburg, which announced this month it was accepting cryptocurrency related businesses as account holders.