Bitcoin Goes Mainstream in Switzerland

Bitcoin Goes Mainstream in Switzerland
Bitcoin Goes Mainstream in Switzerland
Chiasso in Switzerland is going to let residents pay their taxes in bitcoin from the start of next year. The decision is part of the country’s efforts to become a global hub for financial technology.

According to the swissinfo.ch portal, authorities approved the new scheme after discussions with cryptocurrency and blockchain companies based in the area. Under the plan, tax payments made in bitcoin cannot exceed 250 Swiss francs (about $265).

“Chiasso is recognized internationally as an epicenter of a growing technological and economic growth for both the canton and in Switzerland,” said the Mayor of Chiasso Bruno Arrigoni.

The head of the town’s administration Umberto Balzaretti explained the canton’s focus on the fast expansion of fin-tech and cryptocurrency as a way to move from the traditional financial sector after the financial crisis.

Chiasso also aims to rival the country’s so-called “Cryptovalley” at Zug which last year announced it would accept payments (of up to $208) in bitcoin for municipal services.

Many Swiss cantons have been trying to attract international start-ups. Zug has already attracted global start-ups such as Xapo, Breadwallet, Etherisc and Monetas. The Swiss town has even drawn up a 2035 development plan to ensure its economy can thrive as global tax laws get tougher.

Authorities in Geneva announced this month a pilot blockchain project for the electronic processing and archiving of official documents.

Global Shift

Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street have joined UBS, BNY Mellon, Deutsche Bank, Santander, NEX and blockchain startup Clearmatics in a project to create a the “utility settlement coin”. The currency was originally started by UBS.

The project could pioneer the issue of cryptocurrencies by central banks.

“It may well inform the way central banks choose to move things forward. We see it as a stepping stone to a future where central banks issue their own [cryptocurrency] at some point,” Hyder Jaffrey, UBS director told Coindesk.

The currency being developed by the banks will be backed by traditional cash.

“The settlement coin will be a collateralized digital currency, backed by cash assets at a central bank, which allows us to transfer ownership easily through the exchange of USCs, thus reducing process complexity and the time taken for settlement,” Kaushalya Somasundaram, the head of fintech partnerships and strategy at HSBC, told Coindesk.

In other words, the utility settlement coin allows financial institutions – banks, hedge funds and others -to pay each other or to buy bonds and equities, without waiting for traditional money transfers. The coins would be convertible into different currencies.

Such securities should be transferred to blockchain systems, otherwise the advantages of the technology would be lost.

The first token exchange using the platform could come as soon as the end of 2018, according to UBS.

 

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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