Switzerland, long the center of banking secrecy for the world’s rich, is taking proactive legislative steps to integrate Bitcoin and other cryptocurrencies into everyday banking, finance and trading transactions within the country.
Johann Schneider-Ammann, the Swiss Economics Minister, recently said at a cryptocurrency conference in St. Moritz that Switzerland will become a so-called “Crypto-Nation.”
Schneider-Ammann was referring to Switzerland’s ambitious embrace of cryptocurrencies and its international fundraising efforts to make initial coin offerings (ICOs) a mainstream financial procedure.
An ICO is a fundraising venture undertaken by countries, financial concerns and investors to create a new cryptocurrency.
Initial coin offering fundraising initiatives are not regulated by governments, central banking authorities or other regulatory bodies. This is mostly because investing in cryptocurrencies has only become recently popular.
Swiss finance authorities are enthusiastic about the country’s chances at remodeling itself as an economic haven for countries, businesses and individuals who want to invest their cryptocurrencies within the country’s banks.
The European banking center has a two-century-strong reputation as tax haven and offshore sanctuary for businesses and countries who wish to pay as little in taxes as possible.
The country also has been wracked by tax evasion scandals in the recent past and hopes to remake its economic image in the digital age alongside the advent of Bitcoin and cryptocurrencies.
Switzerland’s ICO gamble
Roman Bruskov, editor-in-chief for DeHedge, a platform for investors in cryptocurrencies and ICOs, believes that Switzerland is taking an outsized risk by embracing ICOs.
“The established history of the Swiss nation as a haven for finance, its constant neutrality in world affairs and its adherence to banking secrecy is making it an ideal refuge for crypto investors and a playground for the germination and development of some very dangerous precedents that could leak into the outside world eventually,” Bruskov said.
Bruskov also said that Switzerland’s long-running reputation for secrecy would only embolden illicit cryptocurrency transactions and money laundering.
“The mere fact that the Swiss government is making such statements puts it, and its considerable weighing in financial affairs, in stark contrast with mainstream global movements aimed at stemming the volatility and rampant spread of cryptocurrencies as a destabilizing force for many economies,” said Bruskov.
Sounding a more ominous tone, Bruskov warned that Switzerland may one day be reputationally tainted by its dalliance with cryptocurrencies.
“It will not be long before we witness the first scandal involving the words ‘Swiss’ and ‘crypto’ in the same headline if such hazardous foreplay with the phenomenon is allowed to develop further,” he said.
Switzerland will host its first Blockchain & Bitcoin Conference in Geneva on Feb. 21.