Swiss bank accounts are known for attractive people looking for discretion. Are Swiss bitcoin accounts next?
As we reported yesterday, Bitcoin may become less attractive to speculators given increasing government regulation. One of the major reasons for that regulation is that cryptocurrencies are the tool of choice for criminals for everything from money laundering to collecting drug and ransom payments.
And to that point, Bloomberg’s Hugo Miller writes a fascinating look at the city of Zug, which has become home to more than 20 bitcoin asset managers, brokers, and digital currency exchanges, as Switzerland’s government has proven to be more hands-off than those in the U.S., China, and elsewhere. The move made sense for the nation, the thinking goes, as an international movement to reduce some of the questionable anonymous banking that took place within its borders meant a loss of revenue that needed to be replaced.
More from the report:
In May 2015, after a briefing from a bitcoin entrepreneur, Zug Mayor Dolfi Mueller sat down with fellow councilors at a pizzeria to discuss what role the town could play. One suggested Zug begin taking bill payments in bitcoin. Mueller contacted digital asset manager Bitcoin Suisse AG, and within weeks the cashier’s desk at city hall had a system in place to begin accepting payment of utility and other local bills. “It was a message to say, ‘We are open-minded,’ ” Mueller says from his oak-paneled office overlooking the clock tower.
A five-minute walk from the medieval city hall are the headquarters of Bitcoin Suisse. Its 20-plus employees work from a sparse apartment flanked by wall-mounted screens flashing bitcoin prices and bid-offer quotes. Niklas Nikolajsen moved to Zug from his native Denmark in 2013 to set up the company; by 2015, it was doing 13 million Swiss francs ($13.3 million) in trading volume a year. Now it’s closer to 300 million francs a month. That, he says, makes him an indispensable cog in the burgeoning bitcoin economy.
Today, Bitcoin Suisse has a dozen bitcoin ATMs in the country, and it says that it takes extra care to vet its clients, screening them and examining the blockchain’s log of past transactions.
Of course critics are less likely to trust the process, and “Crypto Valley,” as the area has become known, far from helping Switzerland bounce back from a crackdown on shady financial maneuvers, is dragging it down the same road. again. Indeed, Miller opens the article with the story of how the hackers behind the Wanna Cry virus used a digital currency exchange called ShapeShift–based in Zug–to swap out the bitcoins they had received in data ransom payments.
The Bitcoin Investment Trust (GBTC) is lower today.