This post is also available in: esEspañol

By capitalizing on momentum in the cryptocurrency market, Swiss authorities are introducing measures to boost Switzerland as a crypto-finance center and prevent “brain drain.”

Providing responsible banking

Blockchain systems benefit both traditional and modern companies. In traditional companies, blockchain helps to make pre-existing financial infrastructure more efficient. In modern companies, blockchain helps to deploy economies that are innovative, trustless and censorship-resistant.

Having made blockchain technology a priority, the Swiss Banker’s Association (SBA) seeks to build a regulated and innovation-friendly environment. This will propel the adoption of cryptocurrencies in broader financial markets.

In a press release, the SBA has issued guidelines that allow crypto companies to open bank accounts in Switzerland. The move comes after several Swiss banks had declined services to cryptocurrency and ICO firms despite favourable regulations for cryptocurrency. With these guidelines in place, Swiss banks are less concerned with the occurrence of fraud by cryptocurrency companies.

Having recognized the challenges associated with granting bank accounts, the SBA held talks with member groups and stakeholders for their opinions to better understand banks’ hesitations. The SBA has additionally established the Crypto Valley Association (CVA). The CVA will focus primarily on adherence to stipulated guidance prior to offering banking services to token issuers.

SBA’s banking guidelines

Employing a case-by-case approach, banks will use the guidelines to determine whether a company is fraudulent or legitimate in its use of blockchain technology. As such, two broad categories have been established:

Blockchain companies without an ICO:

As laid out, these companies incorporate blockchain technology within their business framework, but do not offer, or intend to offer, digital tokens to raise money from retail investors. Such companies must be treated akin to a small-medium enterprise (SME) account, and follow strict guidelines. These include creating detailed business plans and proving resources for the venture.

Blockchain companies with ICOs:

Companies under this category issue tokens to raise money in either crypto or fiat for their endeavours. For companies that issue tokens in exchange for fiat currency, the SBA imposes stricter guidelines. These companies must additionally adhere to Swiss Know-Your-Customer (KYC) and Anti-Money Laundering (AML) standards.

Practical application of guidelines

All stipulated guidelines for blockchain companies comply with Switzerland’s code of conduct for due diligence and fair banking. As well, banks and financial institutions can issue their guidelines in line with their respective business activities.

These guidelines will support the growth of Switzerland’s blockchain and cryptocurrency industry, making it a “diverse fintech ecosystem.” Moreover, they also address the urgent need for corporate bank accounts to be granted to blockchain companies while still maintaining the financial integrity and reputation of the Swiss financial industry.