Zulu Republic 101: Why We Selected Zug as Our Headquarters
This is the third installment in a new series of posts explaining the fundamental concepts and objectives behind Zulu Republic’s products and services. Read about our overall vision for the ecosystem in Part 1, and our plans for Zulu Pay in Part 2.
For a few years now, cryptocurrency and blockchain tech companies have been flocking to a small town of 30,000 residents on the edge of a lake in Switzerland, just a short 20 minute drive or train ride south of Zurich. The trend has been so substantial that the town, Zug, which previously hadn’t been especially well known internationally, has earned the name “Crypto Valley” and appeared as the subject of numerous cryptocurrency news articles around the world.
You might ask yourself, what does a small town on a Swiss lake have to do with a cutting edge technology like cryptocurrency?
The story about how Zug got the name Crypto Valley isn’t exactly clear, but the most likely version dates back to a meeting in 2014 between city officials and a group of visiting entrepreneurs, where the idea emerged to create a brand identity for Zug similar to that of Silicon Valley but focused around cryptocurrency and financial technology in general. Regardless of who originally came up with the catchy moniker, the name stuck and the rest is history.
By 2014, the city had already become the home base for a few important names in the cryptocurrency space, including Bitcoin Suisse and Ethereum. But the factors that drove the first crypto companies here are the same factors that continue to attract countless more — including Tezos, Bancor, Bitmain, and us.
According to a recent report from CV VC, the number of blockchain-related companies in Switzerland and Liechtenstein has doubled over the past year, with a total of over 600 companies calling the broader Crypto Valley region home, with over 3,000 total employees and a market cap of roughly $44 billion among the top 50 ventures alone. In fact, Crypto Valley was recently named the fastest growing tech hub in Europe.
So what are the factors that make Zug so attractive to cryptocurrency entrepreneurs?
In short, the favorable regulatory environment. While the regulatory situation in many countries is either unclear or downright hostile, Switzerland is repeatedly ranked as the most cryptocurrency friendly nation in Europe.
As far back as 2014, Switzerland’s regulatory body for the finance sector, FINMA, announced that they would not formally regulate Bitcoin but allow the technology to develop organically so as not to deter innovation. This created an environment of regulatory certainty for founders to feel confident enough to establish their ventures here. Most recently, on December 4th, 2018, Switzerland’s Minister of Finance, Ueli Maurer, remarked that the country has no plans to create any new legal framework for the cryptocurrency industry. Instead, the plan is to tweak existing laws to accommodate the sector, in an effort to maintain Switzerland’s competitive advantage among other regions courting blockchain companies.
Switzerland has long been a business-friendly, low-tax, freedom-oriented country. Beyond that, it consistently ranks as one of the top countries in the world for quality of life. It has a low level of bureaucratic complication, a well-respected, sophisticated legal system, low corruption levels, high-availability of investment capital, a strong concern for privacy and human rights, the list goes on and on…
Even the fundamental structure of the Swiss political system and culture make it the perfect fit for blockchain tech: it’s highly decentralized, highly multicultural, with a high-participation, direct, bottom-up democracy, and a respect for individual sovereignty and economic freedom. Fittingly, these are among the definitive characteristics and concerns of the cryptocurrency movement as well.
Of course it also helps that the Canton of Zug has probably the most attractive tax situation in an already low-tax country. But the city’s commitment to blockchain technology is unparalleled. In 2016, Zug made headlines around the globe when it became the first municipality to accept Bitcoin as payment for government services, and again in 2017 when they announced a trial program for the blockchain-based Zug-ID system. In 2018 they also announced a pilot program for blockchain-based voting.
Ultimately, in addition to all the perks of setting up business in Zug, the name Crypto Valley has become a sort of self-fulfilling prophecy: the more blockchain companies move here, the stronger the community gets. We’re proud to be surrounded by such an excellent community of people and organizations working towards similar goals. Organizations like the Crypto Valley Association and CV VC work to make Zug the supportive, inspiring cryptocurrency hub it is and will continue to be.
In our quest to spread cryptocurrency adoption around the globe, we’re looking forward to being an active part of that community for years to come.
To learn more about Zulu Republic and create your free account, visit our site. For regular updates on what we’re building, follow us on Twitter.
To try out Lite.IM, our full-featured BTC, LTC, ETH, and ZTX wallet for social media and messaging apps, just send any message on the platform of your choice: Facebook Messenger, Telegram, or SMS (US/CAN only: 760–548–3460).
