Switzerland is one of the countries in the world that has been the most receptive towards Cryptocurrencies thus far; however, just recently two major banks within the country have formally broken any agreements with crypto-startups. Yet, the actions of these banks are in stark contrast to public sentiment and that of the governments who strongly want the financial industry to partner more with this budding form of finance.
The Causes Behind The Decision
Based on this the Swiss Financial Authority has decided to begin instituting policies to ensure that financial institutions in Switzerland have effective mechanisms to engage with companies originating from the Cryptocurrency sector. This movement was sparked not only by the banks pulling out of their deals, but also because the media has reported that Swiss financial institutions are declining crypto startups requests to establish bank accounts or other financial contracts with the banks. This has all caused quite a stir due to Switzerland’s position as one of the most crypto-friendly nations in the world.
The Bank Who Cut Ties
Zuercher Kantonalbank or ZKB is one of the financial institutions that was reported for having denounced the contracts with crypto-businesses. ZKB was said to have closed all accounts for approximately twenty of the crypto-based businesses that were registered with them. Due to the actions of ZKB and other banks in Switzerland, the Cryptocurrency communities in Switzerland have taken action.
The crypto-startups have begun moving their places of operation further out to countries near to Switzerland taking their revenue and ideas with them, which has greatly displeased the Swiss government. The exodus of crypto-startups will undoubtedly have undesirable effects on the Swiss, not just economically but the Swiss will now have to work to rebuild their image as a haven for Cryptocurrencies within the global landscape.
The migration of crypto-startups out of Switzerland has already begun to spread ill-effects onto Swiss citizens. In a part of the country known as the Crypto Valley due to the high proportion of crypto-companies that are based there a spokesperson for the crypto-businesses stated that many people from the surrounding areas gain employment from these businesses. The spokesperson went on to add that without the businesses continued support, many of these people would be left without a job.
Yet, the spokesperson stressed that if Swiss banks were no longer willing to provide effective financial services to the crypto-community that there would be no way of them continuing to work within the country. In addition, the governor of the Swiss National Bank, Thomas Maser went on to add that the authorities did not want to push away Cryptocurrencies due to the many new avenues that they will create for the economy.
New Plans Are Made
In order to quell the brewing storm, the Financial Minister, Federal Councillor Ueli Maurer, has begun drafting a set of documents that will serve as a bridge between crypto-companies and the financial system. At present, the petitions for certain Cryptocurrencies to obtain the legal right to operate banks has been denied but there are hints that this may not last forever. One thing is for certain Switzerland has seen the potential of Cryptocurrencies for the future and is fighting to keep them in their borders.