How Zug, Switzerland Became Known as Crypto Valley
Switzerland is home to Crypto Valley, a global blockchain and digital currency haven for emerging startups.
Crypto Valley’s location is in Switzerland because of it’s favorable political, economic and technological environment.
Switzerland has flexible regulations and a progressive political system that support new and innovative projects such as emerging blockchain based startups. Economic stability and the Swiss stance on innovation attracts foreign investment opportunities. Switzerland is also home to world-class research institutes that take on entrepreneurial projects in the blockchain and digital currency space.
The opportunities Switzerland provides for their people, therefore, creates excellent talent from within and attracts great talent from abroad.
Progressive political system
Blockchain-based projects can innovate in a secure legal environment because of Switzerland’s stable, predictable and decentralized political system. They also offer low taxes and business-friendly regulations.
In today’s uncertain international legal climate, blockchain-based startups have difficulty gaining traction and thriving. The Chinese, Russian and South Korean governments impose stringent regulations against digital currencies and blockchain based startups.
Unlike these countries, Switzerland opts for a free market approach. Even when politicians are involved, they are open to blockchain technology by making an effort to understand the potential implications of the blockchain.
Attractive for foreign investment
Switzerland is attractive for foreign investors because of its economic stability and transparent legal system. The Swiss Cantons, or states, also offer tax incentives that attract companies of all sizes to establish operations in Switzerland. Some Cantons even offer a ten-year tax deduction for new enterprises.
Apart from foreign investment, Switzerland also receives substantial investment from multinational corporations. Based on the study ‘Research and Innovation Activities Multinationals in Switzerland,’ multinationals contribute around 70 percent of the total investment in research. Furthermore, the 20 multinationals which spend the most on research generate around 4.7% of GDP and create 80,000 jobs in Switzerland.
Having foreign investors and multinational corporations who fund research projects can be an important step for blockchain-based startups. Not only does this help them gain additional funding and access the right networks, it increases the opportunity for new corporate partnerships. Given the rise of private enterprise blockchains, the opportunities are limitless.
Home to world-class research institutes
Switzerland is home to world-class research institutes including the Swiss Federal Institute of Technology (ETH Zurich) and the Ecole Polytechnique Federale de Lausanne (EPFL), which is in the top 20 QS rankings.
Switzerland’s investment in research drives the country’s success. With a population of only 8 million, Switzerland’s economy depends on the intensive development of the country’s intellectual potential. Swiss Universities have therefore received strong state support and a high standard of education.
Since technology contributes so much to Switzerland’s international success and economy, Swiss Universities such as ETH Zurich and EPFL organize events and courses to bring together students, academic researchers, security experts in digital currencies and blockchain technology. Researchers at Lucerne also get involved in blockchain initiatives, including ethereum-based identity solutions.
Blockchain-based startups, therefore, have the opportunity to explore the new technology with experts in the field, in a community environment that encourages and praises their research.
The making of Crypto Valley
Switzerland’s progressive government, foreign investment, and world-class research institutes make it a Silicon Valley-esque hub for digital currencies and blockchain startups. As time progresses, Crypto Valley will likely grow bigger and better.
In the meantime, it still has a lot of areas to improve. Crypto Valley may be a haven for blockchain-based startups, but there are still many barriers for newcomers such as gaining financing and setting up shop.
Nevertheless, Switzerland is one of the best places for a blockchain or digital currency-based startup to thrive in a safe, supportive and legal environment.
Image credit: Wikimedia Commons
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