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- The Swiss government is encouraging blockchain startups to set up shop with new laws that lower legal barriers.
- As per the reports, Existing Swiss legislation has “proved its worth” regarding income, profit, wealth, and capital gains taxes.
- Swiss Department of Finance has concluded that existing tax laws are fully compatible with blockchain and distributed ledger technology (DLT).
As it is quite evident that Switzerland is a darling country for cryptoprenuers and blockchain enthusiasts. It at least encourages the emerging crypto industry unlike China, Russia, and even the US that barely cares about it.
However, what’s more, exciting about this nation very recently is that the ‘top-level authorities of Switzerland have decided to trim-down legal barriers’ for companies operating within this ecosystem.
Crypto Regulations in Switzerland – “Transfer of Security Tokens“
Per the most recent announcement, the Swiss government is looking at relaxing crypto regulations in the country. Reports on July 1, 2020, notes that the National Council, which is the lower house of the Federal Assembly of Switzerland passed a legislative package unanimously.
The move impacted around a dozen financial laws, bringing favorable changes that would encourage new firms to set up shop and start operating from the country.
The newly amended law will create a friendly environment for the work of distributed registries. It removes the flaws in the existing framework, especially when it comes to transferring security tokens.
Up until now, the transfer of security tokens must be registered in writing much similar to the exchange of traditional bonds.
The latest amendment calls for the ‘free movement of these security tokens’. It means that the security token holders will be able to freely transfer the token/assets on the blockchain and not necessarily maintained in writing.
On the other hand, companies or service providers can offer those services without legal ramifications, said, Rolf H. Weber, professor, professor of financial market law.
According to Weber, if we carry the existing laws, the transfer of security tokens becomes inconvenient just like the traditional exchange of bonds. However, with possible amendments in the future, the complete process will be much more straightforward and faster.
If the package passes the final voting in the Council of States, it streamlines the entire process for both users and service providers.
As per the reports, the latest amendment is based on a Federal Council proposal filed in 2019, and will now be passed on to the Council of States for further actions.
Crypto Regulations and Swiss Authorities
It all began when the National Council of Switzerland passed the ‘legislative package’ on June 17. On June 19, the Federal Council agreed and acknowledged with the ‘Federal Department of Finance” on a point that country doesn’t need any modification regarding tax laws. We know that the country’s tax laws considered less favorable.
However, the Federal Department of Finance, notes that the present taxation framework has proved its efficiency when applied to cryptocurrency businesses.
Besides this, The amended laws also suggest eight provisions. These provisions elaborate the process for blockchain and crypto companies on how to request and secure business operating licenses very quickly and much easier than before.
Additionally, the Provisions may release for company owners to reclaim their losses in case of bankruptcies. Overall, both the traditional finance sector and governments of most countries, are judicious about blockchain and cryptocurrency.
In another report, Switzerland’s Incore Bank is reportedly expanding its digital asset solution by collaborating with the Kraken exchange. It says that Kraken users can access the banking services of Incore Bank.
Kraken joining Switzerland’s bank is one of the latest news following the country’s new proposed regulation in crypto arena.
Conclusively, these encouraging regulations are giving rise to crypto businesses already operating in a country such as Bittrex.
The country has been a blockchain startup hub for a long time now. More so, it seems to have a tenacious spirit to keep things this way for a long time.
Rolf H. Weber, chair of the working group for regulatory issues at the Swiss Blockchain Federation and professor of financial market law also voiced his opinion on a matter that country is encouraging blockchain adoption on a greater level. He referred to this move as ‘a political objective’.