Switzerland hasn't had a standard-bearer for its budding fintech industry – until now. A vocal backer of financial technology firms has emerged from surprising quarters.

Switzerland has the ideal conditions for a fintech hub – a history in banking and leading educational institutes like ETH in Zurich. It is also home to a host of wealthy potential startup investors. But cities including Singapore, London and New York have flourished instead.

Swiss finance minister Ueli Maurer (below, speaking in German) a representative of the right-wing People's Party (SVP), emerged as Switzerland's main fintech industry promoter on Wednesday, revealing the country's plans to attract fintech firms with lighter touch regulation than deposit-taking banks.

«Fintech is going to be an important element of our financial marketplace strategy,» Maurer, who is most closely identified with the SVP's farming roots because of his years as a lobbyist for vegetable producers, said at a press conference in Bern.

«We want to offer solutions that allow Switzerland to advance to a top fintech center internationally,» and for fintech to underpin Switzerland's finance industry.

Bern Takes on Fintech

What representatives of Switzerland's fintech industry have been repeating matra-like is set to become reality: regulatory conditions are to be eased for fintechs to more easily grow, become a competitive part of the finance center, create jobs and foster innovation.

This goal has now been articulated at the highest level of Swiss government – and fintech has an eloquent backer of these goals and plans in Maurer, as «Mr. Fintech».

This is a surprising development for Bern, which until now hasn't addressed the future of finance in Switzerland with particular energy or vigor and has neglected top adopt fintech as a part of the financial marketplace here.

Specifically, the Swiss government wants to introduce a series of measures to attract fintech startups to Switzerland.

Fintech Licenses

The most notable is to establish a license for fintech firms, which would allow them to accept client funds but remain outside the usual depositor protection scheme.

The firms can take up to 100 million Swiss francs in deposits, but may not lend funds.

The government is proposing a deadline of 60 days for holding money in settlement accounts, which is meant to ease fundraising by crowfunding. The 60-day grace period applies not just to fintech firms, but to crowdfunding in general.

Today, providers without a permit can accept funds from 20 people at most, a rule the government is proposing to scrap in order for crowdfunding to accept funds from an unlimited number of people.

The government is also proposing setting up a «sandbox» area for fintech providers to try out their technology in a live environment, without being regulated by Finma. 

Maurer's Masterstroke

Bitcoin and other virtual currencies didn't figure in the government's plans disclosed on Wednesday. The finance department should work towards lowering the barriers to entry for virtual currency and asset firms, a government working group said.

Switzerland has developed as a cryto-hub after Bitcoin firm Xapo moved its headquarters to Switzerland recently.

Maurer didn't specify what fintechs will have to show in order to win a Swiss license, though he made it clear that services should be differentiated from banks.

Money-laundering and terror financing rules however apply for fintech firms just as they do for banks, he said.

The government needs to conduct a consultation period in order to be able to hand out fintech licenses, which requires new legislation. Maurer however managed to win the «Mr. Fintech» crown by exploiting the political and legal room available to the fledgling industry to the greatest effect, without affecting existing Swiss law.