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Switzerland's attempts to market itself as a hub for cryptocurrencies are replete with contradictions. Official Bern is still largely focused on the traditional banking sector, which is shutting out token providers. 

Cryptocurrency advocates cheered when Swiss economy minister Johann Schneider-Ammann minted the term «crypto nation Switzerland» for the first time in January at an exclusive alpine enclave above St. Moritz in January (click here to read finews.com's report from the event).

It seemed to be the starting gun for a new strategy from Switzerland's financial center, which has been in identity crisis since giving up its formerly iron-clad banking secrecy laws recently.

The alpine nation could instead woo crypto and blockchain industry firms to Zug's «crypto valley» in order to build a crypto hub in Switzerland, was the thinking. But token firms may not be able to escape new laws being proposed in Switzerland, which imperil the young industry.

At first, Switzerland's business-friendly, hands-off approach as well as shrewd local marketing for Zug, where citizens can pay for everything from city fees to restaurant tabs in bitcoin, worked: countless cryptocurrency firms have enlivened the start-up scene by setting up shop outside of Zurich.

Suspicious Banking Industry

Crypto firms have pitted themselves against the Swiss banks, the backbone of the country's finance industry, which have watched the crypto craze with growing suspicion.

Banks hold an active role in attracting cryptocurrency firms to Switzerland – mainly as a deterrent. Last year, finews.com reported on crypto firms being turned away by banks, which didn't want to «get their hands dirty with cryptocurrency money at the moment,» as one banker put it.

Concerns Hard to Understand

Crypto Finance founder Jan Brzezek, formerly a long-standing UBS banker, recently referred to an «abstinence by big Swiss banks in the crypto sector,» in a finews.ch interview  (in German). Bitcoin Suisse, the country's leading crypto transaction platform, had to head to neighboring Liechtensein to clinch a bank account, founder Niklas Nikolajsen told finews.com last year. 

Vision&, an asset manager for blockchain technology, echoes this experience. The start-up said it was impossible to clinch a banking relationship with either Swiss giant.

«The objections are difficult to understand,» CEO co-founder Lidia Bolla told finews.com. «Our firm is a self-regulating organization, meaning it is not different in this respect to an independent asset manager.»

Escape Route Liechtenstein

Like many Swiss-based crypto firms, Vision& diverted to Liechtenstein. «Because we were in contact with Bank Frick already with our client offering, it wasn't any problem to open an account for our business as well,» Bolla said.

The frosty tone between Swiss banks and the country's nascent cryptocurrency scene is set to chill further due to draft law. The proposal calls for the recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes, the OECD body which implements transparency and automatic data-sharing.

A Killer Article

The recommendations contain an article that is viewed by token advocates as a «crypto killer»: bank accounts will become obligatory for firms and legal entities. The token industry is alarmed at the development.