As a matter of facts, the majority of the funds raised through ICOs have been executed in Crypto Valley. We tell you why Crypto Valley is a fruitful ground when it comes to ICO.
5 Reasons for an ICO in Crypto Valley
Let’s start with reviewing some numbers. In 2017, according to different sources, more than one fourth of all funds have been raised in Switzerland, which together with Liechtenstein forms the famous Crypto Valley. More impressive, that five out of the top ten ICOs in 2017 are Swiss based with such projects like Tezos, Bancor or Status. Why, would one ask, are these project conclude their ICOs in the Alps in the center of Europe?
In order to answer this question, we will use the main characteristics of Blockchain based solutions. We will show, that the reasons to do an ICO in Crypto Valley follow exactly the basic beliefs of the crypto community.
Entrepreneur friendly Ecosystem
Switzerland hosts the headquarter of some of the largest top 100 global fortune companies like Glencore or Nestle. The big enterprises share the same reasons why they are situated in Switzerland. The ecosystem does support entrepreneurs. The communities usually do not actively attract business supporting them to move here, they rather create an environment that helps entrepreneurs to flourish their business. How they are doing it? Just to name two examples: low taxes, and to take especially care for a very well calibrated education system in order to have the needed top talents.
The power of decentralization and peer2peer
There is a natural competition between the cantons of Switzerland which is anchored in the constitution. This keeps the communities actively seeking to stay attractive for business and private persons to settle down on their perimeter. Compared with other countries or technology hubs like Silicon Valley, Switzerland is rather small and you are everywhere almost in walking distance or at least very fast within more or less two hours. The Swiss Railway system is one of the densest and regularly awarded as one of the best, and for sure very accurate when it comes to keep the schedule. The technology hubs naturally evolve with no support of the government. Like the in Zug, the heart of Crypto Valley, situated Crypto Valley Labs (CVL). It was the initiative of three local entrepreneurs. This hub evolved to the de facto physical manifestation of Crypto Valley. Why? Since we are all humans, we need to interact also in the real world, discuss and elaborate on things. Many people just drop by in the Crypto Coffee or attend a meetup to challenge their ideas and connect to the community. The CVL does not stop in Zug. What out, soon you will see more abroad. All in order to connect the community and give it a place to work, like a ‘worldwide home for blockchain’.
Consensus driven distributed, immutable Ledger
As already mentioned at the beginning, it is a fact that a lot of money is collected in Switzerland. One of the main reasons for that is also that Switzerland has a consensus driven direct democracy. Discussed not only in the parliament, but more important decided by the people, this usually leads to quite stable, liberal and pragmatic regulations and laws. The Swiss do not like centralized approaches, as they are seen as inefficient and expensive. As one consequences, whe see in many codes the possibility of self regulation within an segment. Crypto Valley Association used this by declaring an ICO Code of Conduct. The codes though are not immutable, but stable. If there is a need of change, the people can start an initiative forcing the government to come up with changes. When new laws are designed, there is a broad consultation process governed by the governance in order to collect all views on the new approach and have a already good version handing it in into the discussion in the parliament. As the parliament is not constituted by professional politicians, the new codes are discussed by entrepreneurs and individuals who are sticked to the real world with an aim to have non academic, but lean and practical concepts in place.
Token Economy
As a matter of facts, Switzerland is rated the country with the highest economic competitiveness according the Global Competitiveness Report (GCR) yearly published by the World Economic Forum. And with 3% it is the country with one of the lowest unemployment rates. Where does this come from? As Switzerland and Liechtenstein never had any natural resources to exploit, the two countries always needed to stay at the forefront of innovation. As already mentioned creating a entrepreneur friendly environment and focussing on talents, Switzerland and Liechtenstein evolved to the safe harbors for banking services and have some of the most healthy financial marketplaces. Many successful entrepreneurs re-invest their wealth in startups. If you have a great idea, it should not be so difficult to find the first investor in Switzerland.
Upon that, the financial market authority (FINMA) has, as one of the first regulation bodies globally, deep dived into the new crypto-based business models and ICOs. FINMA came up with a very clear and rather simple framework for the tokens, the blood of the new economy. Still some adjustment are due, however, it clearly shows FINMA’s attempt to create again a entrepreneur friendly environment. All supported by two of the Swiss ministers who have initiated a task force last year in order to create an environment that the new ecosystem, Crypto Valley, can foster.
The small structures and autonomy of the local communities enable companies to test their solutions in real life. Just to mention two projects: Canton of Schaffhausen and Canton of Zug both are testing a new decentralized, blockchain based electronic ID, which will enable a lot of new applications like e-voting.
Since Switzerland is not part of EU, it still has its own very strong, independent and stable currency Swiss Franc. The national bank is very open and sends clear statements towards the market, which leads to certainty and is the base for a stable financial system as well the domestic economy. The author would not be surprised, if the first by a bank as trusted entity backed stable coin will be implemented soon. This would be a next cornerstone for new blockchain based solutions. Many crypto banks and asset managers, as well as exchanges are about to get their licenses soon. Other important steps to create a future fluid market for crypto tokens.
Open Source
Another corner store, of basic concept as you wish, of the blockchain community is the open source approach. In order to trust into a system, the source code is open for everyone to verify. Switzerland has the same high standards when it comes to data and privacy protection like the surrounding EU and according to Bribe Payers Index the lowest level of business corruption. Doing business in Switzerland is foreseeable and with fewer risks than in other jurisdictions.