SUISSE news Spring 2018
Banking / Financial
As billions of people prepare to watch the world’s best football nations face one another in Russia in less than a month’s time, an increasingly fierce battle has been raging off the pitch. The Crypto World Cup may lack the mass appeal of its football equivalent, but countries the world over are locked in a momentous struggle to be crowned the winner. Switzerland is very much the form team of the moment, but will it be able to fend off pretenders to its throne?
The Crypto World Cup is an international competition to become the global hub of crypto and blockchain activity. This contest has heated up as countries – recognising the potential of this nascent industry – have sought to outdo one another. New laws and regulations continue to bedrafted, all with the aim of encouraging blockchaincompanies to set up shop in one jurisdiction or another. Such proposals cover everything from tax, legal issues,securities impacting cryptocurrencies and initial coin offerings (ICOs) to crypto mining, crypto funds and crypto exchanges.
At present, Switzerland is ahead of the curve. Some of the world’s leaders in blockchain, including the EthereumFoundation, Xapo, Ripple and IOTA, now call our Alpine nation home. This trend has progressed so rapidly that the Confederation has been given the nickname “Crypto Valley”. Yet just like the Nati in Russia, who face the mighty Brazilians, Switzerland is up against many crypto-progressive countries like Singapore, Bermuda and Malta.
On May 8th, 2018, the Swiss Chamber of Commerce of Ontario came together to discuss blockchain, ICOs, and the role of Crypto Valley in leading global blockchaininnovation, as well as how the technology can be applied across various sectors from mining and shipping to land registries and cross-border payments.
We considered how FINMA’s stance on securities regulation has played a pivotal role in inspiring the global crypto community. In the US, the Securities and Exchange Commission has been less than welcoming. Chairman Jay Clayton recently stated that every ICO is a security.Switzerland, however, has taken the opposite approach and advocated for a fairer framework. In assessing ICOs, FINMA focuses on the economic function and purpose of the tokens issued by the ICO organiser. The key factors it will consider are the underlying purpose of the tokens and whether they are already tradeable or transferable. Tokens can be characterized as payment tokens, utility tokens or asset tokens. Only the latter and any hybrid token will be subject to securities regulation.
Switzerland’s framework has inspired regulators across emerging markets, particularly in the Caribbean.Barbados, Bermuda and Anguilla are all bidding to become leaders in the field, guided by the Helvetic example: balancing the regulation of this nascent industry with the importance of encouraging innovation.
This discussion represents the first in a series of what we hope will be a means of encouraging Canadian companies to hear about what we in Switzerland have to offer. Our industries, our people and our efficient business environment will continue to cater to the leading blockchain companies in the world.
Few will bet on Switzerland to lift the World Cup trophy in Moscow on July 15th. Our country’s hopes of winning the Crypto equivalent are far better.
To our Swiss compatriots competing in Russia and in Crypto Valley, we say to you:
Allez la Suisse ! Hopp Schwiiz! Forza Svizzera!