According to the World Economic Forum’s Global Competitiveness Report (2017), Switzerland is ranked number 1 out of 138 countries as the most competitive and productive in the world.
This data collated by numerous academics covers key indicators including great institutions, infrastructure, macroeconomic environment, education, market efficiency, financial market development, technological readiness, business sophistication and innovation.
Zug is the “Crypto Valley” and not other places because only Zug has all – and not some – of the aforementioned elements required to be a cryptocurrency and blockchain hub at the time of writing. Where Zug is trying to be the full-package, alternative cities could only be the half-package at best for now.
Barriers to entry exist when compared with other blockchain-friendly cities such as San Francisco, London, Tokyo, New York, Singapore and Amsterdam. The main barrier being the Swiss attitude of letting innovative things take their own course, with nominal government interference. Switzerland has a favourable regulatory environment for financial and technological startups.
Despite the significance of this “Crypto Valley”, this title is expendable because it does not completely live up to its nickname. The CIA World Factbook states that Switzerland has zero international issues or disputes. Nevertheless, this same source also states “secrecy rules persist”, and this is what makes it expendable as a blockchain hub for now. Switzerland is vulnerable to entities concealing the source of illegally gotten money, which must be addressed with urgency if they want to get taken seriously in the long-run.
Providing privacy is understandable, but providing full anonymity raises disheartening question-marks for ethical business people. If they provide better translucency within their infrastructures, this could help their progress. On a more positive note, the Swiss are advanced at determining authentic businesses from scams. For example Switzerland shut-down a fake cryptocurrency scheme called “E-Coin” in September 2017. Many people have a prejudice towards Switzerland; thinking all they know is about hiding money, which is not true in entirety.
Zug has an enterprise-friendly culture and a receptive local government. Its’ excellent quality of life, enterprise-friendly environment and modest taxes have drawn numerous global organisations, developing an international, diverse society, and direct proximity to a web of powerful connections worldwide.
Switzerland ranks amongst the top 3 in the best quality of living indexes including ones by The Economist, OECD and Mercer to name a few. This peaceful country in the heart of Europe provides a safe environment, welcoming young entrepreneurs from authentic startups, to experiment with new things without the fear of being prosecuted for draconian laws they may not be aware of. This enables inventors to introduce changes and new ideas in the way things are done within innovative sectors such as FinTech. The Swiss are the best in the world at this, and their police are the most reliable in the world according to WEF.
In terms of friendliness, an article on CoinTelegraph reads:
“Beginning January 2018, Chiasso, Switzerland will allow its citizens to pay taxes in Bitcoin, following the lead of Zug.”
In 2013, the Swiss government approved the Parliamentary Group for Digital Sustainability (Parldigi), which is a proposal to treat bitcoin as foreign currency.
Furthermore, Swiss Federal Railways, their government-owned national railway carrier, accepts bitcoin as a form of payment nationwide. Please bear in mind, this entity carries just under 400-million passengers per year, has over 30,000 employees, and an annual revenue of more than $8-billion USD.
In Zug, people could pay their utility bills using bitcoin too. According to sources, Switzerland has never been involved in a war since its modern independence in 1815, this includes both WWI and WWII. Switzerland has been putting money to good use for the past 300 years.
8 Steps Zug Could Take to Grow as the Global Cryptocurrency and Blockchain Hub:
- Introduce friendly regulations and make compliance straightforward for startups
- Ask more government figures to make supportive comments in the public sphere about blockchain, and get them to attend high profile events/conferences/meet ups hosted by Zug
- Develop a physical infrastructure for blockchain tourism (hotels, museums etc.), workplaces (accelerators, incubators etc.) and educational facilities (colleges, universities etc.)
- Accept cryptocurrencies in all places within this new physical ecosystem, including for B2C (food, travel etc.) and B2B (rental payments, business fees etc.). Possibly even create own token called the “Zug” coin for this
- Improve Anti Money Laundering (AML) and Know Your Customer (KYC) mechanisms, particularly through RegTech
- Showcase the latest blockchain technologies such as Slock.it or ShareAndCharge.com through usage in all buildings within this new physical ecosystem
- Endorse public adoption, mainly through showcasing high profile projects and entrepreneurs in this space and through appointing a blockchain authority
- Publicise all of the above across mass-media
The blockchain and cryptocurrency ecosystem will undoubtedly bring in trillions of dollars to the world economy, especially if one goes by estimates from reliable sources such as the WEF and White House.
According to data by the CIA on the market value of publicly traded shares; the US alone holds $25.1 trillion, followed by China with $7.3 trillion and then the European Union with $7.1 trillion. This data is only on securities and tokens are not merely securities. They are a store of value and could be anything from securities, commodities, currencies, and utitilies to name a few – depending on the issuer.
So what the world is witnessing at the time of writing is comparable to the beginning of Dutch East India Company stocks (securities), California Gold Rush (commodities), fiat money (currencies), and invention of Electricity (utilities) to name a few. And these conceptions are happening simultaneously!
This new phenomenon of tokens are going to add a tremendous amount of value to the world economy. Hence, accurately regulating them would be smart, and making them illegal could be harmful for the national wealth of decision-makers in the long run.
Consequently, if Zug takes all of the eight steps aforementioned in this article, even I may apply for permanent residency to help them build the “Crypto Valley”.
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Derin Cag is the founder of Richtopia and co-founder of Marketing Runners and Blockchain Age. Richtopia’s mission is to enrich lives using innovative information, with an ultimate vision in alignment with the UNDP’s Sustainable Development Goals.