Representatives from Switzerland’s growing cryptocurrency and blockchain sector say it has matured into a viable and respectable industry that demands to be taken seriously by banks.
“The hype, nonsense and scams have gone away,” says Daniel Haudenschild, President of the Crypto Valley Associationexternal link (CVA), referring to a “wild west” phase over the last two years that saw several flimsy and phony companies set up and go bust, burning millions in public investments.
“We are now seeing products, that have been building up for the last two to three years, reaching maturity,” he said on the fringes of the CVA conferenceexternal link in Zug. “We are seeing the big tech players coming out of the shadows to drop anchor.”
The most prominent of these has been Facebook, which recently set up a foundation in Geneva to govern its cryptocurrency payments project Libra. “This has brought the word cryptocurrency to a billion lips,” he said. “Whatever reservations you may have about Facebook, the fact that they chose Geneva is phenomenal.”
Switzerland’s blockchain industry has mushroomed to 750 start-ups and support firms, such as legal and consulting. But many companies still struggle to get access to basic banking services, despite the intervention of the Swiss Bankers Association last year.
“It’s a daily nightmare,” says Herbert Sterchi, a Swiss blockchain entrepreneur. “It’s still very hard to get a bank account if you’re in crypto. This is still a major issue for companies.” Start-ups can use cryptocurrencies as initial capital in Switzerland, but often have to go to Portugal or Estonia to get a bank account, he added.
Despite these problems, other countries have sat up to take notice of Switzerland’s progress as a blockchain hub. This includes Cho Eun-Hee, mayor of the Seocho district of Seoul, Korea. “Korea used to think that blockchain was all about cryptocurrencies,” she told swissinfo.ch. “I am now convinced that this technology holds the key to the future.”
Cho wants to set up a bilateral exchange of Korean developers building up their blockchain experience in Switzerland while encouraging Swiss companies to establish a presence in Seocho. She is also holding talks with Swiss educational establishments to develop a programme to instruct Korean schoolchildren in blockchain technology.
Having set up a pilot electronic identity project aimed at encouraging pensioners to make more use of public services, Seocho is exploring options with Swiss specialist Procivisexternal link to expand eID among the district’s half a million population.