A new, virtual currency – Bitcoin – saw the light of day in 2009 and the popularity of such cryptocurrencies has been gained momentum ever since. Switzerland is now at the forefront of blockchain technology, boasting its own sprawling Crypto Valley of 960 companies and over 5,000 employees clustered mainly within the region of Zurich and Zug.
Not many places in the world are more idyllic than the city of Zug. Situated on the shores of a pristine alpine lake with snow-capped peaks in the distance, it infuses the visitor with a sense of old-fashioned traditions. Yet looks can be deceiving; Zug and its picture-perfect surroundings have become a cutting-edge epicentre of blockchain, the revolutionary technology behind Bitcoin and other cryptocurrencies.
Switzerland's Crypto Valley is home to early innovators like the cryptocurrency exchange platform Bitcoin Suisse, which among other things operates Bitcoin ATMs in most Swiss cities, and Zug's local government itself, which started accepting payments in Bitcoin back in 2016 and taxes since 2021. Indeed, the second-most popular cryptocurrency after Bitcoin – Ether – was created in a conference room just five minutes away on foot from Zug's train station. Start-ups move to Crypto Valley from all over the world primarily because of legal certainty, Switzerland's world-class infrastructure, access to universities and the Valley's ever-stronger ecosystem.
The spirit of blockchain technology is well-aligned with Switzerland's values of decentralisation and empowering citizens.
Rapid growth despite Corona
From July 2020 to February 2021, Crypto Valley saw record growth despite the global COVID-19 crisis. According to a report published by PwC, the valley's top 50 companies' market valuation increased during this period by 680%, from USD 37.5 billion to USD 254.9 billion. A flock of 11 unicorns – companies valued at over USD 1 billion – call Crypto Valley their home. Ethereum (USD 157.2 billion), Cardano (USD 40.6 billion) and Polkadot (USD 29.3 billion) are leading the flock.
The COVID-19 pandemic has catalysed digitalisation, and blockchain technology has made great gains thanks to this development. These gains dovetail with the additional momentum that fintech's boom has been granting Crypto Valley.
Globally trailblazing blockchain legislation
With new legislation on blockchain and distributed ledger technology applications, which is being introduced in two steps in February and August 2021, respectively, Switzerland has established a bedrock that solidly shores up Crypto Valley's future prosperity. The new law creates, inter alia, a sound legal basis for issuing and transferring security tokens and introduces a new license for security token exchanges. It also strengthens the property rights of crypto asset holders.
"The new Swiss regulations outpace those of most other countries. In the EU, for example, a plan to introduce a license for security token exchanges similar to the Swiss one is still in consultation," explains Luzius Meisser, a co-founder of Bitcoin Association Switzerland.