10 Reasons Why Switzerland Is the Best Crypto FinTech Destination
There are many reasons to be totally fascinated with Switzerland. From its robust economy and FinTech industry to its picturesque mountainous scenery, it is undoubtedly one of the most notable spots on earth.
In recent years, it has become one of the hottest blockchain destinations and home to some of the industry’s leading players. In this post, we are sharing our thoughts on why and how it has acquired this status. This is by no means an exhaustive list. Feel free to let us know what you think in the comments.
1. Crypto Leaders Club
We selected Zug, Switzerland, Europe’s “Crypto Valley”, for a number of reasons, ranging from the country’s resilient economy, its status as a leading financial center and an innovation hub.
With its stringent data protection and privacy laws, we believe it offers а great environment for our operations and guarantees our clients’ best interest.
Most importantly, it has a prominent place on the blockchain map, leading the charge for technological advancement in the space. It is no wonder that some of the most well-known names in the industry, including Xapo, Monetas, Metaco, the Ethereum Foundation and Nexo, are all registered in Switzerland. Being Swiss-based will help, for instance, Nexo to provide its crypto-backed loans in the most efficient manner, enabling the crypto community to retain ownership of their digital assets without selling when access to instant cash is needed.
2. Crypto Valley
Dubbed the “Crypto Valley”, the Swiss canton of Zug is home to the Ethereum Foundation and the Crypto Valley Association of which Nexo is a member.
A combination of favorable factors like government support, infrastructure and a business-friendly environment has caused crypto investors to flock to the country giving a further boost to the industry.
In the latest evidence of its potential, a new ranking by BlockShow named the nation the most blockchain-friendly country in the world. And earlier in 2018, the country’s economic minister Johann Schneider-Ammann said Switzerland’s focus on crypto should transform it from a “crypto valley” to a “crypto nation”.
3. Decentralization Since (at Least) the Napoleonic Wars
A tiny Western European country, Switzerland has become a policy-making role model in the old continent with its decentralized governance system and political power spread across its 26 cantons.
Decentralization has been singled out as one of the main reasons for the country’s sustainable success, making it arguably the world’s most democratic nation.
Unlike many administrations, hell-bent on keeping the status quo, Switzerland puts emphasis on constantly trialing new concepts and models, a practice Swiss economist Robert Nef refers to as an “ongoing experiment”.
There have been plenty of studies examining the “Swiss model” in an attempt to shed light on why devolution of power can lead to production efficiencies, as demonstrated also by the distributed ledger technologies.
A recent example comes from none other than the city of Zug which has just announced a successful local blockchain-based vote trial.
4. Innovation Hub
With its century-old traditions, world-class research institutes and a favorable investment climate, Switzerland ranks on top in terms of innovation. According to the World Intellectual Property Organization (WIPO), the country was first in the world with its innovation program for seven consecutive years in 2017.
WIPO is compiling an innovation index looking at infrastructure, human capital, institutions and other factors.
The country ranks particularly high in terms of “knowledge and technology outputs”. It has the highest ratio of patent applications per million inhabitants in Europe, more than double that of the Netherlands which comes in second.
Its innovation efforts are well exemplified by a move by SIX, who owns the Swiss stock exchange in Zurich, which earlier in July 2018 announced a project to build the world’s first fully-integrated digital asset trading platform.
5. Banking Industry
While the banking sector in the country has long been touted as the economic locomotive, with increased scrutiny in the past years, the industry has proven that it can be a trendsetter in terms of innovation and modernization.
Driven in part by the blockchain, the banking sector is swiftly adopting digitization, automation and distributed ledger as the new norms.
In a report on the industry, Deloitte outlines the key opportunities for the future, talking about the potential for improved efficiencies and innovation resulting in cheaper, faster and more scalable solutions to the benefit of, both, consumers and businesses.
Its privacy regulations and banking secrecy make it one of the safest locations for any FinTech business. Being outside the grip of both US and EU jurisdictions, and having the most rigid confidentiality provisions enshrined in its constitution mean that there is hardly any other country capable of providing the same level of security.
6. Ripe for Disruption
The Swiss tech and FinTech scene have been at the forefront for a number of years. Now, a new breed of agile and innovative startups is joining the local market, shaking up the balance of power.
According to a research by PwC, the disruption in the FinTech space will originate mainly from startups (76%) and ICT and large tech companies (66%).
As a result, 70% of the players said they feared increased competition in the future which might put their profit margins under pressure, and result in loss of market share.
Also, worth noting is that as much as 75% of respondents plan to adopt blockchain applications over the next three years.
7. “The Most Stable Country in the History of Mankind”
It is undoubtedly one of the most financially, politically and economically stable countries on the map. Bestselling author Nassim Taleb calls this quality “antifragility”. In his eponymous book, he writes that
Switzerland is the most antifragile country in the world. Its robustness and attractiveness are in inverse correlation with unrest, disorder and volatility around the world.
In an interview for Foreign Policy, Taleb defined the nation as “the most stable country in the history of mankind”.
Its neutrality, embedded in its political system, burgeoning banking and insurance industries, and strong national currency are attracting investment capitals from all corners of the world.
Swiss Bankers Association’s Banking Barometer showed that despite the challenging environment, the banking sector retained its stability in 2017, with most banks reporting a profit.
To guarantee stability and transparency in the crypto industry, the Swiss Financial Market Supervisory Authority FINMA published specific guidelines on conducting an initial coin offering (ICO), becoming one of the first official bodies to formalize the process.
8. Wealth Management Center
Unsurprisingly, the country tops the ranking of the world’s leading wealth management centers with 25% of global cross-border assets under management in 2014, according to Deloitte.
Swiss institutions managed or administered $2 trillion at the end of 2014, up 14% from 2008 and ahead of the UK with $1.7 trillion, the paper said.
Freedom comes in many forms and may mean different things to different people, but there is hardly any other place where it is more diverse and evident.
Switzerland is a true melting pot of cultures and beliefs with strong human rights laws. Despite pervasive gun ownership, its crime rate is considerably lower compared to many of the developed countries.
All of these factors blend in together to make it:
10. “The Best Country in the World”
Not only is Switzerland the preferred destination for global wealth,
it was ranked the best country in the world for 2017 and 2018 by U.S. News.
The judgment was based on criteria like business climate, entrepreneurship, quality of life, culture, fun and adventure, to name a few.
In another ranking, Swiss Zurich came in second on the list of the best cities in the world. As a further evidence of its attractiveness, HSBC named Switzerland the best country for an international career in 2017.