New blockchain era for Switzerland. What you need to know?
Switzerland is one of the leading fintech hubs worldwide. According to a study conducted by the Institute for Financial Services Zug (IFZ), the country has unimaginable potential for innovation, entrepreneurship, and financial technologies internationally.
Last year, Switzerland introduced a new law, the "blockchain law". The implementation of this law will follow two stages: the first which already occured on the 1st of February, and the other to eventuate in August. Invoked on the 1st of February were reforms on company law. In the second phase in August, the State will put into effect upgrades of the financial market infrastructure. These will allow Switzerland to have a properly managed cryptocurrency industry where all actors are fully informed of the opportunities & risks associated.
Other benefits of the blockchain law are:
- It will allow swift trading;
- It will attract a larger number of participants;
- A diverse range of products may be accessible affordably.
Who are the first beneficiaries
There are about 3 organizations which already started to benefit from the blockchain law. These are:
- Crypto Finance
- Sygnum banks
The Crypto Finance company received a securities house licence from FINMA. This license will enable the company's Crypto Broker division to activate trade for new digital securities. These securities may include shares, collectibles, assets (e.g. real estate), and luxury goods.
Sygnum banks and SEBA already received their licenses in 2019. They also recently announced their digital assets. Sygnum tokenized a variety of wines from another company on its Desygnate platform. It's believed that more companies will deliver their digital assets via the bank.
In addition to the above companies, more entities have shown interest in company formation in Switzerland and the acquisition of FINMA licenses. These entities include Bitcoin Suisse, Taurus and Lykke, etc.
Are there any drawbacks?
So far, there are no major challenges as far as obtaining a license is concerned. By the way, similar processes were initiated in 2019, but could not work out as expected. However, 2021 has a greater potential to yield better results. For more insights and tax guidance, feel free to reach out to our specialists at SIGTAX.