Switzerland has long been interested in the cryptocurrency market. However, despite regulators’ efforts, banks have been resistant in working with crypto-based projects. Because of this strict stance, crypto startups stemming from Switzerland are threatening to move to more friendly locations. This migration could prove fatal for the Swiss-crypto market, as the country is home to over 500 blockchain startups residing in its “Crypto Valley.”
Unfortunately, it’s hard for these startups to work with banks who refuse to provide service. As reported by Reuters, banks are worried about violating the different rules and regulations in place surrounding digital assets.
Yet, the Swiss government has been working with banks to establish new regulations to simplify the process, which looks to have paid off. On September 21, the Swiss Bankers Association (SBA) announced new regulations for crypto startups looking to work with banks. SBA’s Strategic Adviser, Adrian Schatzmann, commented on the change at a conference:
“We believe that with these guidelines, we’ll be able to establish a basis for discussion between banks and innovative startups, making the dialogue simpler and facilitating the opening of accounts.”
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Establishing New Rules
Currently, a small amount of Switzerland’s 250 banks work to convert crypto deposits into fiat—a necessary service for projects funded via Initial Coin Offering (ICO.) Two of those banks stopped their services, with the fourth-largest Swiss bank, Zuercher Kantonalbank (ZKB,) closing over 20 accounts.
Some ICO services may not have run anti-money-laundering or know-your-customer checks on their investors, meaning that banks could violate laws via association. However, the new guidelines recommend these checks and services while detailing to ICO startups what information they should provide to banks. Checks are separate for ICO startups and those who raise money through other matters.
SBA Deputy Chief Executive, August Benz, states that the banks’ initial feelings on the matter have been positive, but we’ve yet to see how they’ll react in practice.
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