The crypto community has always been popular in the financial sector today, where theregulation has long sparked heated debate. Last year, Fazzaco published a special featuretitled "Cryptocurrency Regulations: A World Tour", which explored the regulatory dynamics ofdigital assets, including cryptocurrencies, in various parts of the world.
As we explored previously, the United States, for example, is still struggling to clarify the natureof cryptocurrency: whether it should be deemed as securities, commodities or currencies. As aresult, there is still a tug-of-war between multiple regulators such as the Financial CrimesEnforcement Network (FinCEN), the lnternal Revenue Service (lRS), the Securities andExchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC)
Against such backdrop, Europe has shown a more tolerant attitude towards digital assets, withSwitzerland emerging as a new haven for crypto firms
A Clear and Strict Legal Framework
As early as 2018, Switzerland passed clear and strict regulations that defined the nature ofcryptocurrencies. This move made market players more aware of their compliance.Furthermore, Switzerland passed the Distributed Ledger Technology (DLT) Act in 2021, whichgave legal status to digital securities, making the Alpine country a global leader in this field
In September, Fazzaco reported that Hypothekarbank Lenzburg AG, a Swiss mortgage bank.became a new member of the Central Securities Depository (CSD) of SIX Digital ExchangeSDX), a subsidiary of Swiss Stock Exchange (SIX Group) and the world's first end-to-enddigital asset platform. SDX is a securities exchange operator and CSD that uses distributedledger technology (DLT) and is regulated by the Swiss Financial Market Supervisory Authority(FINMA).
lt is worth pointing out that Zug, a Swiss canton, known as the "Crypto Valley", has attractedover 960 crypto-based startups and created over 5,000 jobs. The local government even allowscitizens to pay their taxes in Bitcoin, showing openness and inclusiveness to emergingtechnologies.
Switzerland's regulatory approach has brought many benefits to traditional banks, startupsinvestors and consumers. Swiss banks such as SEBA and Sygnum are crypto-friendly andoffer comprehensive services, including tax statements, coin storage and deposit insurance. lnaddition, FINMA was the first regulator to approve a crypto fund, ensuring the legality of marketparticipants. In terms of compliance, Zug's government accepts Bitcoin for tax payments, andfinancial institutions such as PostFinance and BBVA also offer crypto services, facilitatingcommunication between fiat and digital currencies
Haven Does Not Mean Tolerance for Gray Areas
Although Switzerland is crypto-friendly, it also has strict KYC and AML regulations, which areenforced by FINMA's supervision to prevent illegal activities. The regulator requires companiesthat provide crypto services to comply with the KYC and AML rules passed by the Swissgovernment in 2018 and to be classified according to their risk level. At the same time, FINMAconducts regular audits of crypto companies and can take administrative or criminal measuresagainst violators, ensuring market compliance and stability. CoinDesk, a media outlet in thedigital asset field, praised Zug as a "small but powerful" and "the world's first cryptocurrencycenter"', which clearly pointed out that Switzerland is a "convenient land for crypto companies tolegally settle", rather than a "lawless land" like some offshore jurisdictions
Conclusion
Switzerland's clear and progressive regulatory approach provides a blueprint for howjurisdictions can foster innovation while ensuring security and compliance for their traders. Asdigital currencies become increasingly mainstream in many regions, regulations likeSwitzerland's may show other countries a feasible way to integrate digital assets
