This article in ETHNEWS indicates that Switzerland may soon enable cryptocurrency businesses access to bank accounts. This statement is based on comments by the finance director of Switzerland’s city of Zug, which is also known as “Crypto Valley.” If true, this could indeed be a major breakthrough for cryptocurrencies, especially if banks can legitimize the Exchange – the source of most crypto-criminal activity:
“Some prominent cryptocurrency proponents in Switzerland expect the country’s politicians and regulators to remove barriers to banking services for cryptocurrency businesses in the coming months. Such a move would level the playing field that crypto businesses share with traditional enterprises.
Heinz Tännler, the finance director of Switzerland’s “Crypto Valley,” the city of Zug, told the Financial Times:
“We hope to clarify relationships by the end of the year at the latest. Time is pressing – other jurisdictions such as Malta and Singapore are very active and making a lot of effort to attract these companies. The lack of access to bank services is a significant competitive disadvantage.”
In a country which quickly adopted cryptocurrencies and blockchaintechnology, banking restrictions could be impeding the pace of growth and innovation. In 2017, Switzerland was second only to the US for the volume of ICO funds generated by a country.
To date, banks in Switzerland have refused to grant conventional bank accounts to cryptocurrency and blockchain startups because of anti-money laundering (AML) laws and other regulatory concerns.
Switzerland’s central bank, financial supervisor, and federal government are “willing to help,” said Tännler. “We have to push certain national institutions to resolve this problem quickly and effectively, but that now seems to be going well.”
According to reports, a handful of the 200 plus blockchain companies in Zug are moving into financial service provision themselves to solve the issue. Others are looking to access conventional banking services outside of the European country.
Tännler believes that blockchain projects should be offered the same services as any other company, to stop them from moving their business to “countries where access is easier, such as Liechtenstein.” Though he agreed that AML and other regulations should be followed:
“I can understand that banks are careful with respect to ‘know your client’ and anti-money laundering. But experts reckon the danger of money laundering is lower than in other sectors of the finance industry.”
Swiss regulators and governing bodies are certainly active in the cryptocurrency and blockchain space. On June 19, FINMA granted what appears to be the first license to a cryptocurrency company, Crypto Fund AG, to distribute investment funds. Early in 2018, FINMA issued regulatory guidelinesfor ICOs, and the forward-thinking city of Zug is even trialing blockchain based voting.
It would not be too surprising to see Switzerland increase its ability to compete with other nations like Malta by improving access to banking service access for cryptocurrency and blockchain businesses.”
It will be interesting to see if pressure is applied from other nations to block this action, since once a crack in the wall is established anywhere the role of managing all Bank Secrecy Act related events becomes significantly more difficult.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group