Do you know that you can buy Bitcoin at every teller machine of the Swiss National Railway? That at every train station you can buy Bitcoin Switzerland
The land of milk chocolate, cuckoo clocks, pocket knives, exquisite handmade watches, mountains, bankers, and this But now Switzerland may be on the verge of becoming something more — a crypto paradise Hi! I’m Molly Jane from Cointelegraph and we are coming to you from Zug It’s also known as the Crypto Valley and Switzerland has been called a Crypto Nation So we’ve come here to check it out
Long before Bitcoin was a gleam in Satoshi Nakamoto’s eye, the city of Zug knew how to attract money With a 14% corporate tax rate, one of the lowest in the world, it became home to nearly 30,000 companies– almost as many as there are people in the town Now, Zug is home more than 400 crypto enterprises all happily ensconced in what has become known as Switzerland’s Crypto Valley And a gorgeous valley it is — with a large lake set against the backdrop of Switzerland’s ever snowy Alpine peaks It’s almost beautiful enough to make us forget why we’re here
We managed, however, to bring our eyes down from the mountains to meet with Dolfi Mueller, the mayor of Zug, who has presided over a policy of accepting Bitcoin to pay for some city services Making him, in a sense, the crypto mayor Everybody in the world was interested what happens in Zug because we have been the first We didn't know anything about Bitcoin We didn't know anything about Blockchain
And so we invited a student which explained us the difference between this things We started it two years ago Now we have about 50 or 55 payments not more And it's only Bitcoin It's not Bitcoin Cash, it's Bitcoin From June 25 to July 1 2018, Zug held Switzerland’s first blockchain-based municipal referendum The vote, which was non-binding, used the city’s new digital ID system Here is a good place
Let's start an experiment with the so called digital ID based on blockchain Every year in summertime we have a great party at the lake side of Zug and there is a firework and we asked then people: Do you want to have a firework again Yes or no? In Switzerland, referendum, that's something holy Has all this converted the mayor into a real crypto HODLer? I'm not interested in cryptocurrency for myself Despite the “crypto mayor’s” lack of personal enthusiasm — get with the program, fella! — Zug’s experiments with crypto are breaking new ground And city services aren’t the only things you can buy with it there
We were told it here in Zug you can use Bitcoin to buy a Ferrari or a Maserati We don't really have the budget for that, so let's go try to buy some wine instead! Hello! Can I recommend you something? Hi I'm looking to buy some nice wine from Switzerland, but I would like to pay with Bitcoin Can I do that here? Yeah, of course You can take this one which you’ve just looked It is a very nice wine, it’s a Syrah
Paying with crypto was as easy as scanning a QR code and the wine was delicious So we left Zug and drove to Lucerne – another important city on the crypto map of Switzerland Here, its prestigious university is offering courses on cryptocurrency and blockchain Hey, now we are over here at the Lucerne University of Applied Sciences and Arts where students can pay for everything with Bitcoin and other cryptocurrencies Let’s go talk to the dean! We have several programs that are focused on blockchain technology and distributed ledger which are small ones which only last for two days and give a short inside and we also have a longer program which lasts for about four months where you really get a really deep inside view in these activities
And right now for the next semester we are also starting the bachelor program courses dedicated to blockchain and distributed ledger All of which makes perfect sense — since the university president’s last name is Hodel So the universities are into it But what about Swiss officialdom? Later that day we met Thomas Moser, an alternate member of the board of Switzerland’s Central Bank, who has been a bit of a downer about blockchain technology, at least according to the news That was fake news! Actually I didn't say it that way
What I said is that I think for innovation and technology to take the next step it has to be something else than just a copy of existing products The innovations in money usually came from the private sector If you think of the banknote that was not an invention by the state That was not an invention by the central bank That came from the private sector from the commercial banks
And then people started to complain about it because there was fraud A lot of people lost money and then eventually it got regulated as a first step and as the second step it got nationalized That's clearly something that could be also repeated with cryptocurrencies We had our conversation with Thomas Moser on the embankment of Lake Zurich, just a few steps from his office in the Central Bank The next day we were nearby, at Bahnhofstrasse 3 — the financial center of Zurich and its most expensive street
This is the address of Trust Square — the former home of a private Lichtenstein bank and now the largest blockchain hub in Switzerland So, Trust Square is a technology hub specialized in blockchain The history behind this is that several blockchain entrepreneurs wanted to have a community So we have 40 blockchain companies here from different backgrounds We want to focus more on working with universities and with corporates
All floors of Trust Square are full with all sorts of blockchain startups – from students with some crazy spaceship ideas to more down to earth insurance projects And these blockchain incubators are in high demand We have you know over 400 players already in Switzerland and the government is very pro-business, very helpful It's a very decentralized culture and it's really in line with what blockchain and crypto assets are FINMA, is trying to move the whole crypto asset business into more regulated security token
FINMA, the financial regulator, categorizes tokens based on the underlying economic function Payment tokens, utility tokens, and asset tokens But what drives this whole process is that every ICO can send the description of its project to FINMA and within 4-8 weeks receive a clear statement whether regulatory provisions are applicable As a result, in 2017, $15 billion were raised in ICOs in Switzerland – the second largest amount of money raised after the US
I would say that one year ago an ICO would cost you roughly 400-500 thousand Swiss francs I think that nowadays you're more and more looking towards the 1 million range here Now, welcome to the Crypto Villa, a 19th century mansion that formerly housed another private bank from Lichtenstein that went bankrupt due to money laundering schemes It is now the home of Crypto Finance AG, a case of the new money literally replacing the old money So is it common in Switzerland that bankers from the traditional financial industry go crypto? Yeah, more and more
In our company we have I would say 80% ex-bankers from UBS, Credit Suisse, and some other large banks We have the whole financial market infrastructure in Switzerland We have the financial system in Switzerland which is very strong, we have a very strong background And so we have a theoretical know-how and then from a society perspective we have a very decentralized government We have democracy
This is matched very well with the whole crypto space How difficult is it to open an account for a crypto or blockchain company? it's very difficult There's only a handful of banks here in Switzerland that openly communicate that they want to have ICO clients open a bank account there One of the problems still is that cryptocurrencies and Bitcoin still have this reputation of being used for illicit or criminal activities And how beautiful will the ending be for cryptocurrency here? Let’s just say that the signs are gorgeous
So is Switzerland a crypto nation after all? Currently I say, yes, we are a crypto nation… on a very early stage, but we have everything to really become a big hub for crypto offering So there's a high probability that we will see unicorns coming out of Switzerland in the next few years because I think the foundation is in place In the future the blockchain technology will be a base technology that is used in a lot of applications and people actually won't realize that they're using a blockchain I think at that stage we still have to think about what would it mean for monetary policy What would it mean for financial stability
Question would also be would there still be private banks, would they still have a role in the payments system We have to overcome some of our own hurdles and take some risks and move forward because the competition is not sleeping We’ll give the final word to our favorite crypto mayor I will finish my work end of this year and I always say it was a very beautiful final of my time as the mayor of Zug Although Switzerland has long been considered the banking capital of the world, it soon can become the global crypto capital
However, I think that cryptocurrencies and Bitcoin still have a long way to go before they see widespread usage As the sun sets tonight over Zug, the crypto valley, Bitcoin may be rising over Switzerland
