Cryptocurrencies have been an interesting trend and a possible opportunity to earn a passive income. Still, nowadays, the web3 market is surely in the spotlight, and digital coins are taking over the global economy. While some countries like China and Saudi Arabia have banned digital currencies completely, others have fully embraced the innovation. Unsurprisingly, the most crypto-friendly country in the world is Switzerland, which is well known for being the global leader in finance and banking, so its initiative to bring crypto into the real world inspired Germany, Malta, and other regions as well. The Swiss government created a stable regulatory framework regarding the adoption and use cases of the coins that prove the trustworthiness of this ideology. The future-oriented vision not only attracts individuals who want to make trading their main job from which they gain a considerable, tax-free income, but it’s also a great opportunity for companies as well to let go of traditional and challenging finance. This is what you should know about the interesting cry-friendly landscape in Switzerland:
Why Crypto?
Switzerland is globally known for its financial sector, which hosts businesses from all over the world thanks to its stable regulatory framework, low or no-tax system, and overall financial inclusion. The future-oriented mindset of Swiss people made crypto an interesting subject that is now part of the country’s regular economy. The country seeks innovation and automation, so blockchain technology has been the perfect answer to its concerns. The most influential coin of all time remains BTC, and according to the Bitcoin price chart, the coin promises growth in the near future that could bring new opportunities in the financial world. Moreover, the synergy between the government and corporations created a general understanding of the need for Swiss banks to take a new direction. The acceptance of digital currency encourages new businesses to start blockchain-based companies and brings incredible advantages for full-time traders and the financial landscape that is undergoing a significant yet positive evolution.Â
The crypto valley
Can you imagine an entire ecosystem that relies exclusively on Crypto and Blockchain? It might sound like an SF scenario, but the region of Zug is now nicknamed ‘The Crypto Valley. Zug has become the epicentre for blockchain technology, with a stable regulatory framework that points to the efficiency of crypto and most industries that rely on Crypto or Blockchain. The formation of the valley began in 2013 when the first crypto-finance startup business was launched in the territory. Later on, 40 more crypto foundations were established in Zug, one of them being the Crypto Valley Association, which aims for the development of the area and a better ecosystem for the newest technologies. Nowadays, the valley hosts over 600 companies with more than 3000 employees, and the numbers continue to expand.
Stable regulatory framework
Switzerland considers cryptocurrencies an asset class, treating the belongings as properties or gold. The importance of digital coins in the country created a stable regulatory framework so that digital assets can be used for beneficial purposes for both individuals and the country. First of all, the main benefit of the Swiss legislation is that it’s fully transparent, so the capital gains from taxes and other internal aspects are shared publicly. Cryptocurrencies can be bought and converted into Swiss francs via dedicated exchanges. The town of Zug already allows citizens to use crypto to pay taxes, and some other regions have embraced this idea as well. Still, the main project that sustains Switzerland’s status as the fastest-growing crypto realm is the Ethereum Foundation, which is proof of the country’s technological advancement and the overall stable and clear regulations regarding the digital market.Â
Tax-free crypto income
When trading becomes a full-time job, you can surely generate a considerable amount of money as a private investor, and you can pay great taxes for your success. When it comes to Switzerland, you can keep all your work and luck, as traders are not subject to any taxation for their income. However, for crypto-based businesses, it’s another story, and they have to pay around 10% for insurance and 7.8% for their profits. So, more precisely, if you are activating as a private investor, you’re buying, selling, and holding crypto as part of your private wealth; you’re tax-exempt. On the other hand, commercials and companies that have crypto as their main income are classified as retained traders, and taxes are applied.
Swiss banks and crypto
The majority of Swiss banks offer access to crypto investments and relevant services in the digital field. The banks seem to see potential in the technology of the coins; however, the products they offer are still limited, and many institutions offer trading opportunities and custody services for Bitcoin and Ether, as well as direct transfers between the popular currencies. Even if the financial system is truly transformative compared to other countries, it doesn’t provide decentralization because, as workers in the field affirm, it’s expensive and hard to set up a crypto offering, so banks prefer to procure them from third parties.
Will crypto replace Swiss fiat money?
The widespread adoption of cryptocurrency is raising some questions among Swiss citizens. Will digital coins replace fiat money? or will Swiss Francs become a cryptocurrency? Despite the hype and the digital-friendly mindset, the adoption of e-franc is sparking some controversies, but since the country is globally known for its impeccable financial landscape, we can surely expect nothing but the best decisions. With or without crypto, fiat money is essential for a backup plan when the digital world might lack some crucial aspects, so the crypto-replacement scenario is not applicable for now. Instead, we can think about a fully contactless payment with no paper needed.
The bottom line
The ever-evolving digital world continues to surprise us with incredible innovations. Switzerland is proof that cryptocurrencies are powerful tools that can push the financial systems to a new path, offering the solutions for financial inclusion, freedom, integrity and transparency. Despite all the challenges of the real-world economy, the digital coins’ technology could reshape the future of global finance.
