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How regulation of cryptocurrencies in Switzerland can suit Russia

This post discusses the potential advantages for Russia if it obtains assistance from Switzerland's banking system and regulatory technologies. It argues that the implementation of a regulatory framework in Switzerland can suit Russia's cryptocurrency market. The proposed framework involves identifying the legal status of a digital asset, creating decentralized exchanges, and making sure wallets with cryptocurrencies are compliant. It also provides an overview of the potential economic benefits, from increased access to global markets and strengthened investor relations to enhanced economic growth. It concludes that Switzerland could provide a viable model for Russia to properly regulate the cryptocurrency industry.

Blockchain technology is causing a lot of controversy. Some experts believe that it is overestimated, while others are sure that the future of many industries, especially the fintech industry, is precisely behind it. The first ones are hard to believe, but the position of the second is confirmed by numerous studies, the growth of startups, the attention to technology from large companies and the interest of the state Sergey Kovtunenko, Executive Director Zichain.

According to UBS, Switzerland’s largest financial holding, blockchain technology will create additional economic value ranging from $ 300 to $ 400 billion by 2027. The opinion of Swiss bank analysts is also supported by the results of last year: it is worth recalling the powerful growth of bitcoin and other cryptocurrencies, as well as the heyday of ICOs, which in December 2017 raised a total of about $ 4 billion.

From startups to giants

cryptocurrency regulation in switzerland

Active development of the market is confirmed not only by dry figures from reports, but also by real examples. First of all, there are numerous startups: the market already has more than several thousand players, and only continues to grow. The number of areas of activity is also striking: for example, a startup Eris Industries delivers solutions in the field of smart contracts, ShipChain allows you to track the parcel from the warehouse to the threshold of the house, and Loci organizes a whole “ideas market” where each user can put their intellectual property for sale.
Large companies are not far behind: while most of them just get accustomed to technology, which is already quite difficult to call new, others create interesting projects designed to improve the social environment, and also make money on them. For example, Microsoft announced support for the ID2020 project to create a single global identity document. The main goal of the project is to help people without documents, which now number more than 1 billion worldwide. Large sellers are in a hurry with the implementation of projects: for example, companies such as Walmart and Nestle are going to use blockchain technology to increase food safety. How? Very simple: track the supply chain, which makes blockchain excellent.

Foreign experience and regulation of cryptocurrencies in Switzerland

cryptocurrency regulation in switzerland

Gradually, technology is being introduced at the state level: projects are being created to reduce the corruption component, for example, as in Georgia, or to simplify the distribution of funds, as in the UK. Another significant indicator of state interest is the adoption of the first legislative initiatives. The leaders in this area are Japan and Switzerland. In the first cryptocurrency, they have officially received the status of means of payment, in connection with which more than half of bitcoin transactions around the world last year were committed in Japanese yen. Nevertheless, for now, the country’s leadership is conservative in Japanese: the title of a truly reliable cryptocurrency will have to wait for more than one year.

The regulation of cryptocurrencies in Switzerland is characterized by the fact that they do not have the status of means of payment. According to the report of the Swiss Federal Council, these are assets whose actions are regulated by a number of documents, including the Criminal Code. At the same time, the country’s legal framework in relation to cryptocurrencies is very well developed: the use of bitcoins when buying goods or paying for services does not require a special license.

Swiss banks are actively opening accounts for companies working with cryptocurrencies, and in some regions – for example, in the canton of Zug – bitcoins are accepted even when paying for municipal services. At the same time, the country is closely monitoring that unreliable companies are not involved in cryptocurrency operations: in order to register for the legitimate implementation of activities, it is necessary to have at least 20 thousand francs, or approximately $ 21.4 thousand, in the account. Cryptocurrencies in Switzerland are taxed at the federal level. Income tax is levied at the canton level, with tax rates being different.

By the way, in early July, another news appeared: the Swiss stock exchange SIX announced the launch of the Digital Exchange cryptocurrency exchange. It will be under the supervision of financial regulators, while it will work according to the traditional banking scheme – token holders will be able to store cryptocurrency, sell it and buy it. All operations will be carried out using the blockchain..

Russian realities

cryptocurrency regulation in switzerland

Discussions of bills that could regulate the cryptocurrency market are also underway in Russia: in January 2018, the Ministry of Finance published the first version of the law “On Digital Financial Assets”. Despite the fact that in our country, transactions with cryptocurrency are not prohibited, they are not allowed. In the absence of appropriate practice, operations are most often perceived as attempts to launder money and cause law enforcement to suspect.

The ideal solution for us would be to adopt the same model by which cryptocurrencies are regulated in Switzerland. It is not as enslaved as, say, the regulatory model in China, it is not as cautious as in Japan, and at the same time it is reasonable and balanced enough to be convenient for all market participants. According to this model, payment for services and goods will be as free as possible – just as it happens with traditional banknotes – but due to fairly high requirements, “one-day firms” cannot enter the market. The taxation system adopted in Switzerland is also suitable for Russian realities: instead of the cantons, we have regions acting, and it will also be wise to levy taxes depending on which company a company operates in.

Numerous studies, expert opinions, an increase in the number of market players and attention to cryptocurrency and blockchain technology in completely different countries prove that it will not be possible to close our eyes and not develop this industry. And the sooner this becomes clear, the better it will be – primarily for the Russian economy.


Read: How to invest in ICO: step by step instructions

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Comments: 3
  1. Tatum

    How can Switzerland’s regulation of cryptocurrencies be adapted or applied in a way that would benefit Russia’s interests?

    Reply
  2. Nova Turner

    How does the regulation of cryptocurrencies in Switzerland align with Russia’s interests and what potential benefits could Russia derive from adopting a similar approach?

    Reply
    1. Madison Marshall

      The regulation of cryptocurrencies in Switzerland aligns with Russia’s interests in a few ways. Firstly, both countries recognize the potential economic and technological benefits that cryptocurrencies bring. By adopting a similar approach, Russia can attract foreign investment and cultivate a favorable environment for blockchain innovation, similar to Switzerland. Additionally, regulation can mitigate the risks associated with cryptocurrencies, such as money laundering and terrorism financing. By implementing a similar framework, Russia can enhance transparency and security within its financial system. Lastly, as cryptocurrencies gain global prominence, harmonized regulations can facilitate cross-border transactions between Switzerland and Russia, promoting economic collaboration. Overall, Russia adopting a comparable regulatory approach can provide it with an opportunity to harness the advantages of cryptocurrencies while safeguarding its financial system.

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