Switzerland sets the pace in the institutional shelter of cryptocurrencies

Relatively low taxation, a developed banking infrastructure and secrecy have made Swiss an attractive country for international investors. From this financial vantage point, Switzerland does not want to miss the opportunity to be the world center for the development of everything related to cryptocurrencies. Switzerland has therefore been one of the first countries that has shown a positive institutional attitude towards investment in digital currencies, with financial and business laws that seek to provide a legal basis for cryptocurrencies based on the blockchain. The Swiss financial system supervisory authority (FINMA) has granted licenses to operate to crypto banks, a crypto stock exchange, and the world’s first digital asset fund. The common objective of the blockchain community and the Swiss Administration is to achieve a common playing field in which digital currencies can be contracted and managed from conventional financial entities.

As a consequence of the advantages of Switzerland and the expectation on the part of the clients around the cryptocurrencies, BBVA He has launched New Gen, an entity based in Switzerland to operate with digital currencies, a line of business with great expectations. This is how the entity advances when it comes to offering a tool to channel the desire of customers to invest in cryptocurrencies through a known and safe intermediary. In BBVA New Gen It is possible to invest in bitcoin or ether, also in stocks or funds, through electronic purses or ‘wallets’. The investor is obliged to declare his Swiss account in Spain if he has more than 50,000 euros as well as the possible obtaining of returns or capital increases. The requirements to have a New Gen ‘wallet’ are: be over 18 years old, not from the United States and make a minimum deposit of USD 10,000, or its equivalent in euros or Swiss francs. In addition to personal information – name, address, telephone, etc. – you must provide the corresponding tax identification for each country in the form that has to be filled out.

According to those responsible for BBVA in Switzerland, “the taxation of accounts in New Gen is the same as that of an account of a Spanish resident abroad (each year the client has to present several declarations; model 720, ETE, IRPF) and It also allows investing in a catalog based on investment themes with more than 10 families in which the client can invest in stocks and investment funds that represent this theme. It has generated a lot of interest among customers between 35 and 45 years of age, many 30% of them are residents of Spain. The key is that it is difficult to find investment accounts like this one from a bank like BBVA “, they explain.

The stable legal framework is essential for the development of cryptocurrencies as an investment instrument or asset deposit, especially in the contracting or purchase processes. It is at that time that the theft of assets and the main weak point of the crypto world have occurred. The expectation is generalized both among private investors and large capitals in the face of the revaluations registered in the past.

“Much of this growth is based on speculative expectations, in which the general public observes that a new asset class is emerging and, without deepening the understanding, begins to act so as not to miss a possible opportunity, although at the same time, it is also due to the entry of institutional investors who are beginning to understand its great potential “, explains Álvaro Casado, director of FS Consulting Strategy at KPMG in Spain.

Tokens

The manager of the Frankfurt Stock Exchange, Deutsche Börse, has acquired a majority stake in the Swiss regulated brokerage Crypto Finance. It is just one example of the movements that take place in Switzerland in this process of adaptation to cryptocurrencies. The Swiss legal framework aims to contemplate, unlike the European legal framework Mica, also the so-called tokenization of company shares or property rights over works of art and collectibles. Right now, cryptocurrencies are part of a much larger universe of “digital assets” that are created and traded with security techniques based on blockchain certifications. One example is Swiss-licensed cryptocurrency bank Sygnum, which ‘tokenized’ shares of a Picasso painting. Sygnum is one of the growing number of Swiss tokenization platforms emerging from legal reforms. These also allow companies to issue digital shares.

Since last October, the Bank of Spain has enabled a registry of firms and financial entities that operate with cryptocurrencies. It is a first step to prevent the ball of fiscal opacity from spiraling out of control. “It is the responsibility of the Bank of Spain to register the natural and legal persons that offer or provide in Spain virtual currency exchange services for fiduciary currency and electronic purse custody services. Individuals whose base, direction or management of these activities lies in Spain, and the legal entities established in Spain that provide these services “, establishes the issuing institute.

Decentralized finance

The most relevant change in the coming months, according to the experts gathered around the European Blockchain Convention recently held in Barcelona, ​​will be the rise of so-called decentralized finance (Defi). The Defi have gone in just one year from representing 20,000 million dollars to more than 100,000 million according to the latest calculations. With the appearance of operators willing to reduce commissions and facilitate simpler products, a geometric progression of assets in alternative products is expected. They are accounts denominated in cryptocurrencies with higher interest rates than conventional deposits. Some are even linked to ‘stablecoins’ or digital currencies referenced to physical assets (currencies or precious metals, for example). Thus, it is possible to contract deposits at 7% per year (in an oscillating cryptocurrency), while in conventional banking, deposits represent a cost for the saver.

Blockchain in Spain

Related news

As a result of the interest that gravitates around everything crypto, in Spain there is a dense network of companies linked to cryptocurrency technology. BBVA’s Swiss initiative is the result of a framework of competition that is growing by specialized fintechs such as Bit2Me, Criptan, Bitnovo, Prosegur Crypto, Onyze, EurocoinPay, Bitbase, 2gether, Atani, Bamboo Defi or Token City. Álvaro Casado believes that the current situation is “the beginning of a new paradigm regarding the conceptualization of money and the economic potential of a new digital world”, which will force institutions and corporations to adapt to a new game board.

In recent months, some regulatory authorities have taken action with cryptocurrencies or, on the contrary, partially or totally restricting these activities. In this last group is China, which has prohibited any type of transaction with cryptocurrencies in the country. In contrast, the same month that China banned cryptocurrency trading, El Salvador became the first jurisdiction to adopt Bitcoin (Bitcoin Law) as legal tender in its territory.