Switzerland has become known as a market-leader in all things crypto and blockchain. The EU country is home to Zug’s “Crypto Valley” which nurtures blockchain businesses and start-ups, and in the last few days the government has trialled a blockchain-based voting and ID system, apparently with considerable success. But critics say that the recent unwillingness of Swiss banks to provide accounts and services to crypto groups threatens to stall the blockchain revolution in the country.
The issue appears to concern the really big players in Swiss banking, like Zuercher Kantonalbank (ZKB), who have of late begun to systematically refuse and close accounts which are associated with cryptocurrency businesses. Recent policy represents a clear about-face from ZKB, who were initially supportive of the nascent industry. Reports suggest furthermore that only a tiny minority of financial institutions in Switzerland are currently willing to allow the deposit of funds raised through initial coin offerings (ICOs).
So what’s changed? It appears that a lack of clarity in government oversight and the particularities of crypto regulation may be to blame for these uncharacteristically short-sighted moves on the part of Swiss banks. Specifically it would seem that the way in which ICOs have been conducted in the country is making financial institutions nervous that they themselves may fall foul of regulatory policy if they accept deposits from crypto groups. At the very least, banks may be wary of authorising accounts for those ICOs who have raised capital without conforming to anti money-laundering (AML) requirements.
It seems clear that only clarification from FINMA, Switzerland’s financial authority, can break the deadlock. And as the country drops down the ICO rankings and crypto projects move elsewhere to meet their banking requirements, both the government and wider community will be keen to see clear action to ensure Switzerland remains at the forefront of the blockchain revolution.
