Switzerland pioneering in Bitcoin growth

Earlier this year, the Swiss Federal Tax Administration announced that no VAT applies to Bitcoin in Switzerland. The country has been taking steps to embrace Bitcoin and blockchain technology.

"This is the most reasonable way to classify Bitcoins in the context of VAT and we are fortunate that the tax administration agrees with our view. Bitcoin is a currency, and thus should also be treated like a currency", Luzius Meisser, president of Bitcoin Association Switzerland, said at the time.

Several big names of the cryptocurrency ecosystem have chosen Zug or "Crypto Valley" as the main base if their operations. The Swiss Bitcoin Association organizes Bitcoin meetups in Switzerland. The Bitcoin Meetup group has 713 Members at present, who meet regularly in Zürich, Geneva, Basel, Zug and Bern to discuss the future of Bitcoin.

Sandra Tolbler, currently working for the Swiss Business Hub US, believes that companies are attracted to Zug specifically as Switzerland is valued for its tradition of international neutrality, national sovereignty and regulatory stability.

"They say that Switzerland offers an excellent operating, financial and regulatory environment and consequentially the greatest level of protection for keeping and trading Bitcoins," she said.

Tobler further elaborates various reasons that make investment in Bitcoin very attractive.

"First of all the "new currency" is decentralized and based on a peer-to-peer principle. This implies it is an independent currency regime with cryptographic proof without the need to trust a third party middleman like a central bank. The system is attractive as the blockchain is public and all transactions are fully transparent.  Only the content is encrypted. For example, all transactions can be controlled by any participating party at any time. Still, one negative associated item is the high fluctuation of the value of Bitcoin."

Moreover, she pointed out that the digital currency makes money transactions possible for people even without a bank account. The use of Bitcoin greatly reduces transaction costs, she added. She is happy to see rise in activity and know-how around Bitcoin service providers in Switzerland and the latest developments that are taking place in the country.

"In addition to having a health fintech community connected to Bitcoin, Switzerland has been pioneering growth in the industry."

With regard to Bitcoin regulation in Switzerland, Tobler said that the various possibilities of laws surrounding the use of the digital currency still need to be fully explored. She believes Switzerland has the chance to lead innovation in financial services.

"We have the rare combination of being an internationally recognized finance center paired with a lot of innovation and know-how in ICT. I hope in five years' time, we will have an even more vibrant internationally recognized start-up ecosystem around Fintech closely interplaying with the banking sector, independent players from the telco, retail and other areas.