Financial analysts are predicting that Switzerland is set to become the global epicenter for the forthcoming cryptocurrency and blockchain technology that it is built on. Reports have emerged that investors are flocking to the affluent Alpine nation in an effort to get in on the virtual action.
Zurich became the first city in the world to setup a bitcoin ATM in 2014, whilst the Swiss national rail company has given passengers the opportunity to purchase virtual currency at over 1,000 distributors across the country since 2016.
The scenic town of Zug which is located just 30 minutes from Zurich has long been a global economic hub due its business-friendly taxation system which has resulted in tens of thousands of companies setting up base in Zug. The companies that have established offices there are diverse ranging from the pharmaceutical industry to large investment firms to commodity trading groups.
However, a new category of business has emerged in Zug and that has led to the town now being labelled Crypto Valley. That is the name of an association set up in Zug in 2013 with the explicit aim of drawing startups dabbling in virtual currency technologies, creation and trading to the town.
Because of its transparent nature, Blockchain has been tipped to become a revolutionary technology, although some remain skeptical over the hype. Blockchain is designed to be a digitized ledger that is updated in real-time and requires no central record keeper. Zug is already home for over 200 blockchain companies, which includes the organization responsible for establishing ethereum which is the second largest cryptocurrency after bitcoin.
The Swiss town has also accepted bitcoin payments for many council services since 2016. However, some have expressed their concerns that the new cryptocurrency revolution could be used as method to launder money. Cryptocurrency is currently not regulated by any fiscal institution - so the opportunity to launder money is high.
A spokesman for financial regulator Finma said, "Creating transparency at this time is important given the dynamic market and the high level of demand. It's particular important to protect against money laundering, since the risk is high in a decentralized blockchain-based system, in which assets can be transferred anonymously and without any regulated intermediaries."