Zurich becomes virtual currency hub

With a good financial environment, more and more Bitcoin companies are moving to Zurich, Switzerland from all over the world.

Xapo is a Bitcoin storage company born in Palo Alto, California, USA. Recently, Xapo CEO Wences Casares was busy moving the company's headquarters to Switzerland. In his view, Switzerland has "stable regulation, neutral international status, and a long tradition in the global financial field."

During the migration, Xapo met many peers. They are scattered all over the world, including Coinpult from Panama and Bitcoin Deutshland from Germany in Europe . Although the business scope is different, these companies at the forefront of financial technology have the same destination: Switzerland.

As more and more Bitcoin companies gather in Switzerland, the Zurich-based Union Bank of Switzerland can no longer sit still. They have shown great interest in the new technology of Bitcoin collection and are trying to develop a legal virtual currency to improve the efficiency of financial transactions.

Switzerland is the world's largest offshore financial center, and its financial industry enjoys a world-class reputation. Switzerland has long been the base of some multinational banks. Now, Switzerland is gradually becoming a base for Bitcoin players. In the future, Zurich may become a virtual currency financial center.

Environmentally friendly

The large number of Bitcoin companies moving to Switzerland is not unrelated to the favorable local environment. So far, Switzerland has not introduced any laws to exclude Bitcoin. Earlier this year, the Swiss tax authorities exempted Bitcoin from VAT, which could have imposed high taxes on Bitcoin exchange businesses and BTM operators such as Bitcoin Suisse . This move played a key role in attracting a large number of Bitcoin companies to move to Switzerland.

When asked about the impact of this on the Swiss Bitcoin business, Eric Wallis, founder of Swiss digital currency company ShapeShift , expressed his appreciation, saying: "VAT exemption helps our business, so that our prices can be more competitive. Bitcoin companies do not need to bear heavy taxes, and the market will become more dynamic."

Luzius Meisser , chairman of the Swiss Bitcoin Association, said that Bitcoin will always be exempt from VAT in Switzerland. In February last year , the Bitcoin Association submitted a formal inquiry to the Swiss Federal Tax Administration ( FTA ) and received a response from the Swiss Federal Tax Administration, confirming that Bitcoin is exempt from VAT.

People outside the community also praised this. Swiss socialist politician Jean-Christophe Skovobo   Jean -Christophe Schwaab believes that VAT exemption could help the rise of Bitcoin in Switzerland. “It is absurd to impose VAT on means of payment.”

Appropriate supervision

In addition to the friendly business environment, the relocation of Bitcoin companies to Switzerland also reflects their attitude towards regulation - neither too strict nor too loose.

Since the birth of Bitcoin, financial regulation has always been a problem due to its anonymity and decentralization. Many countries have even directly stopped Bitcoin services. However, the Swiss Financial Market Supervisory Authority ( FINMA ) has made many innovations in Bitcoin regulation.

Last year, FINMA published an announcement titled "Bitcoin" on its official website, defining Bitcoin as a virtual currency that can be used to buy and sell items, and requiring a Bitcoin service license issued by FINMA before it can be used for transactions or other commercial purposes.

During the same period, the world's first Bitcoin exchange, SBEX , was born in Switzerland and regulated by FINMA . This means that virtual currencies have come a long way towards legalization and have taken a big step forward in consumer protection. Alexis, founder and CEO of SBEX , said, "This opens up fantastic opportunities for cryptocurrencies in Switzerland and establishes a clearly regulated environment in this area."

After 16 months of investigation, Zurich-based ECUREX became the first digital currency trading platform to fully comply with the Swiss Banking Act, which means that ECUREX can even conduct banking-related business in Switzerland.

ECUREX CEO Paolo Tasca said that Switzerland's regulation is stricter than other countries because Switzerland considers digital currencies such as Bitcoin to be equivalent to other foreign currencies. This means that the professional operation of Bitcoin trading platforms needs to comply with the Swiss Banking Act and the Swiss Anti-Money Laundering Act. "We believe that a stable regulatory environment is not only beneficial to us in the long run, but also to our customers."

In addition, the Swiss financial industry's tradition of protecting customer privacy is also an important factor in attracting Bitcoin companies. In the United States, the threshold for customer privacy in the banking industry is very low. According to legal regulations, U.S. banks are required to fill out reports for all transactions exceeding $ 10,000 , including the account holder's name, account number, address, and social security card number.

UBS follows up

Switzerland is considered to have a strong reputation in the banking and high-end financial sectors, and is one of the most innovative countries in the world. These two factors combined give Switzerland an advantage in the development of financial technology. Major multinational banks in Zurich have also expressed interest in the potential technology behind Bitcoin.

UBS is one of the first banks to put its plan into action. It is reported that UBS is developing a prototype virtual currency that it hopes to provide to banks and financial institutions. This virtual currency will use Blockchain technology to facilitate transactions for the financial platforms of institutions, and Blockchain is the core technology used by Bitcoin.

However, the difference between this virtual currency and Bitcoin is that UBS proposed a "practical settlement coin" that hopes to combine real currency with central bank accounts.

For example, UBS might use its own blockchain -based platform to issue bonds, while another bank might have a blockchain -based stock trading platform, but both platforms would use the same utility settlement coin.

UBS and other financial institutions believe that once Blockchain technology becomes widely popular, it will help financial institutions settle transactions within seconds, rather than waiting two or three days as it does now. This will reduce risks, reduce transaction costs, and improve transaction efficiency.

UBS executives said the company is not planning to issue digital currency on its own, but hopes to work with other market participants to create industry-level products, including asset management companies, regulators, clearing houses and exchanges. UBS e-commerce director Hyder Jaffrey said UBS has already contacted potential partners, but he did not disclose the specific names of the institutions.

The UBS project is still in the conceptual stage and is being run by the bank’s London-based cryptocurrency lab, which is run by Alex Batlin , the lab’s director, and UBS CIO Oliver Bussmann , who said the currency would be the first building block for the popularization of blockchain -based platforms in mainstream financial markets .