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Swiss regulators are currently striving to provide clear rules to the banking industry so that cryptocurrency-related projects can remain fully operational in the country. The decision comes in response to a recent trend in which cryptocurrency startups started migrating out of the country after two big banks started to deny them business.
If Swiss banks maintain their strict position on cryptocurrency activities, Switzerland will likely lose business with rivals at sea.
Cryptocurrency start-ups will leave Switzerland if the banking situation does not improve
According to Switzerland is losing business with neighboring countries, including Gibraltar, Lichtenstein and the Cayman Islands, which have more cryptographic-friendly banks. Although the cryptocurrency industry is currently small compared to the traditional financial and banking sector, it is experiencing extremely rapid growth. According to local authorities, the Swiss cryptocurrency community currently employs hundreds of people.
Despite the growth of the cryptocurrency community and the emergence of " Crypto Valley ", a town in the Swiss canton of Zug that is home to about 200 to 300 companies related to cryptocurrency constitute a significant threat to the community.
Heinz Taennler, Chief Financial Officer of Zug, mentioned that these cryptocurrency startups may choose to leave the country if they have insufficient access to the banking system. Without an appropriate bank account, these businesses will stop surviving.
"All their banking relations go to Lichtenstein," Taennler told Reuters. "These are hundreds of jobs that have been created, and every job is important."
Thomas Moser, member of the board of directors of the Swiss National Bank ( SNB ), mentions that some cryptocurrency startups had even asked the Central Bank to intervene in this situation.
"They raised concerns about the problems of opening bank accounts that worried them and asked them for help," Moser told Reuters. "I said that the SNB was not dealing with that, but that they had to talk with FINMA."
FINMA, the Swiss Financial Market Supervisory Authority, discussed with SNB and the banking badociation various approaches to guarantee this cryptocurrency. startups are not bothered by the existing rules of the banking sector.
"We would not want to close the door on the opportunities that such an innovation (cryptocurrencies) could bring," said Moser
Banks ask the government for insurance
then FINMA is taking active measures to remedy the situation Swiss banks are also turning to the government for more clarity when it comes to working with businesses related to cryptocurrency.
Unfortunately, two banks in Switzerland no longer work with companies related to cryptocurrency. One of the banks is the Zuercher Kantonalbank ( ZKB ), the fourth bank of Switzerland. An industry source told Reuters that at the end of last year in 2017, the ZKB has closed more than 20 bank accounts related to cryptocurrency.
Swiss banks are concerned that some companies that have launched ICOs have not undergone proper anti-money laundering (AML) controls for each donor. If the banks worked with these cryptocurrency companies, they would violate their AML rules.
While the solution is to create a clearer legal framework and rules for cryptocurrency companies and ICOs, creating new systems is quite difficult. However, Switzerland is taking up this challenge head on. They are evaluating new rules and developing a new framework to encourage banks to work with cryptocurrency projects.
The government's decision to improve the relationship between the banking community and cryptocurrency can be motivated by the decline in the cryptocurrency market. . According to a study of PwC and Crypto Valley Association with regard to the sum of the funds of the ICO, Switzerland moved from second place in 2017 in sixth place in 2018.
The current problem has also sparked a meeting between Swiss Finance Minister Ueli Maurer, FINMA, the Central Bank and the Swiss Bankers Association (SBA). After the meeting, the SBA also set up a list of conditions to be followed for each bank, particularly with regard to the opening of bank accounts for projects related to cryptocurrency.
"Banks are currently reluctant to open accounts for companies with specific points of contact with ICOs and cryptocurrencies – because of risks such as fraud or money laundering," the statement said. SBA.
Swiss regulators are therefore looking for ways to remain competitive without fraud or fraud. Lichtenstein is gaining momentum as Swiss banks are cautious
Although warning from the Swiss Bank has driven out many projects related to cryptocurrency, the loss to Switzerland has become a major problem Lichtenstein
David Henderson, the founder of the Swiss Sweetbridge Foundation, says that because of the actions of banks, Many cryptocurrency-related projects operating in Switzerland are currently on hiatus or have closed down.Henderson mentioned that, as it is difficult for cryptocurrency projects to utilize. If the funds they earn from an ICO if they can not access their bank account, many companies have turned to Lichtenstein and Gilbraltar instead.
"I can not pay the wages because our money is taken there," Henderson said. "We can not move it."
There are however two remaining Swiss banks that are open to working with cryptocurrency-related startups and will accept ICO funds.
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