Crypto and Fintech are both one of the most beloved and hated words in the financial industry right now. There are many supporters of digital currency, but there are also many who see it as a passing trend that will fade away.
I personally see it as the latter, digital currency is the future of the financial industry and those who resist it will perish in this hypercompetitive environment. I am certain that blockchain is the future of offshore banking and international bank licensed entities. For those who see it as an immense opportunity the questions that permeate in their head are where to invest and where should I begin operations.
For example, it’s blockchain technology and fiat pegged “coins” that will allow smaller offshore banks to compete with larger banks on remittances. This technology will eventually allow offshore banks to transfer funds internationally at low or no cost, thus bypassing SWIFT and other high-cost platforms… not to mention the fees charged by your correspondent bank.
The country of Switzerland is looking to Fintech as a way back to the top of the financial industry. Switzerland has been investing a ton of money in financial technologies and has quickly become one of the best jurisdictions to obtain a Fintech License.
One of the benefits that you will find in Switzerland is that the banking and financial regulators classify digital currencies as assets. It is also one of the best countries regarding the protection and safeguard of financial technology companies who wish to invest in the country.
As of the writing of this article, there are no ICO based regulations, but depending on the size of the Initial Coin Operation some banking laws may apply. The reason for the relaxed laws is that Switzerland is welcoming all the digital currency investors with open arms.
Just last month, Switzerland issued the first license to a Crypto bank. Although this might seem uneventful to other jurisdictions, this is a huge victory for the country of Switzerland and to the recipients of said Crypto license.
Two banks were the recipients of the banking and securities dealer license last August, SEBA and Sygnum. This is seen as a huge step forward, as the financial technology industry is expecting a wave of banks to come flooding into the island.
Concerns regarding how the financial industry will regulate cryptocurrency banks are the reason it took so long for the industry to come to Switzerland, but this time they are prepared with a set of rules on how to combat money laundering on the blockchain.
The institution that regulates this law is called the Swiss Financial Market Supervisory Authority and it has published a set of rules on how they plan to apply their regulations to anti-money laundering within the blockchain.
Most notably, cryptocurrency firms and banks must transmit customer data with each transfer. Just as banks do with wire transfers, the receiving banks and crypto exchanges will see the beneficial owner of the inbound transfer.
Meaning that in order to obtain a license to operate as a cryptocurrency exchange or bank in Switzerland you must reveal a certain amount of your financial practices to the Swiss government. It is necessary for the crypto bank to show to the corresponding authorities all of the transfers and information about the clients and the beneficiaries associated with the transfer and sale of digital tokens.
Because of the reasons mentioned above, the Swiss government does not permit Cryptocurrency banks and exchanges to receive cryptocurrencies from firms that do not copley with these practices. That is to say, a Swiss frim may only receive an inbound transfer if the sending firm includes the customer information, as all banks do via SWIFT.
At this time, only SEBA and Sygnum have to correspond to these regulations, but the Swiss Authorities plan to use these two companies as a test to see how they can regulate this ever- expanding industry. The objective, in the foreseeable future. It is for Switzerland to become the next tech haven for the cryptocurrency industry.
Switzerland is home to more than 10% of all European Fintech Businesses, most of these businesses are settled in the city of Zurich. Making Zurich the Silicon Valley of Europe.
Startups have started forming in Zug to accommodate to this growing industry. The goal is to open and establish a blockchain-based infrastructure to be able to trade and sell digital assets in a more safe and practical way.
The Swiss stock exchange SIX plans to set up a new platform sometime next year. If this is done correctly, this will be the perfect marriage between the financial and the digital currency industry in Switzerland.
Innovation is what is making the country of Switzerland stand out in this ever-growing hyper- competitive market. Switzerland has the means and the talent to make your financial technology-based company a tremendous success.
If you are planning to open a Crypto bank, wish to begin investing in the field, or are planning to expand your previously set up company. The country of Switzerland is one of your best options for growth.