To ensure that blockchain-related projects can remain fully functional within the country, the Swiss Bankers Association (SBA) has released a new set of guidelines on September 21 that intend to bolster the availability of financial services to cryptocurrency companies.
Cryptocurrency Startups Threatened to Leave Switzerland if Banking Situation Doesn’t Improve
Despite the incredible growth the crypto community has experienced in Switzerland, which lead to the emergence of a new “crypto valley” in the town of Zug, the country’s tough banking laws pose a huge threat to the community.
A July 19 report from Reuters suggested that the country’s cryptocurrency-related businesses have started taking their banking relationships to countries such as Gibraltar, the Cayman Islands, and Switzerland’s neighbor Lichtenstein. A lack of access to a banking system prompted many of the country’s 500 cryptocurrency and blockchain businesses to reach out to the Central Bank in order to intervene with the situation.
While the governing board at the Swiss National Bank referred the companies to FINMA, the Swiss Financial Market Supervisory Authority, a member of the bank’s governing board told Reuters that they would be working on resolving the issue as they do not want to close the door on the innovation that cryptocurrencies bring to the country.
Switzerland Eases Crypto Regulations in Response to Market Withdrawal
As most banks were worried about violating the different rules and regulations in place surrounding digital assets, especially the ones regarding anti-money laundering (AML) checks, the Swiss government and the Swiss Bankers Association worked close on introducing new guidelines that would enable easier access to banking services.
Another important reason that prompted the framing of the new guidelines is that only 250 of Switzerland’s banks allowed companies to deposit the cash equivalent of cryptocurrencies raised in ICOs. Out of the 250, two withdrew their services in 2017, and Zurich Cantonal bank, the fourth largest Swiss bank, closed the accounts of more than 20 companies associated with cryptocurrencies, the International Business Times reported.
The Swiss Bankers Association (SBA) announced the new regulations for crypto startups looking to work with banks in a September 21 press release. According to the International Business Times, the SBA said it welcomed the increased demand of blockchain companies in Switzerland and took a positive stand because it boosted the “Switzerland’s attractiveness as a financial center.”
The SBA published the guidelines with the help of an internal working group, involving member banks and an independent, government-supported association called Crypto Valley Association, established to build the blockchain and cryptographic technologies.
The guidelines aim to bring blockchain regulations at par with that of traditional banks’ legal framework to make the process simpler and to reduce the associated risk both for banks and cryptocurrency startups.
“The SBA had recognized the challenges of opening accounts for blockchain companies at an early stage and communicated its members’ interests and unresolved questions to various authorities,” the press release read.
Featured image by Bryce Durbin