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Yes, we have no reason to be complacent, there is still a lot to be done. The whole crypto-financial space needs to professionalize and the technology needs to improve. And there is still a lot of regulatory uncertainty in many jurisdictions.

We hope in the future to see decentralized stock exchanges taking off and more and more asset classes to be put on the blockchain and traded digitally. This would potentially strengthen the entire financial system, as well as provide cost savings and increased transparency.

And where is Bitcoin Suisse in this beautiful new crypto world?

We are continuing to develop in the direction of a fully regulated financial institution - possibly with a securities dealer- or banking license here in Switzerland and/or Liechtenstein. In five years' time, one will no longer be able to distinguish the major players in this field from the established financial industry. .

You mention Liechtenstein. Bitcoin Suisse CEO Vayloyan recently indicated in the press that Bitcoin Suisse would move into the Principality. How do you see this as a major shareholder?

Switzerland and Liechtenstein are both progressive jurisdictions for crypto-financial companies and business, but they are developing at different speeds and in different areas. The Principality recently sent a new Blockchain Act for consultation.

At the same time, the Swiss Financial Market Supervisory Authority Finma has indicated that in future a license as a securities dealer will be required for the trading of numerous crypto-assets. This has created some complications for us and we have to adapt to the changing regulatory landscape.

«I very much see Switzerland and Liechtenstein as one contiguous ‘Crypto Valley’, stretching from Zug to Vaduz»

Why?

We only learned about the latest Swiss guidelines from the newspapers and were quite surprised. We had to short-notice suspend trading with numerous tokens and lost business to other brokers abroad who were not subject to the same requirements and who often offer less protection of clients than we do.

This has been somewhat unfortunate, and we would ideally have hoped to have been more involved in providing feedback to regulators from the side of industry and have had more time to adapt and seek the appropriate licenses which will now be required to operate in the industry in Switzerland

How did you react?

We are increasingly looking into the licensing topic and are evaluating all possible ways forward for our business - including but certainly not limited to providing some services out of Liechtenstein.

This is work which we have now stepped up significantly and with more and more crypto assets likely to be treated as securities, we clearly need to operate as a licensed securities dealer. Depending on how the jurisdictions develop and with a view to access to the European market, it might be the best solution for us move at least our international or EU-facing part of our business to the Liechtenstein jurisdiction, which is an obvious location for doing this.

But this does not come at the cost of suspending our Swiss business. I very much see Switzerland and Liechtenstein as one contiguous ‹Crypto Valley›, stretching from Zug to Vaduz.

With all due respect, that sounds like a threat.

No, certainly not. Our name is Bitcoin Suisse, with a big line under ‹Suisse›. We have always been in Switzerland and I hope we always will be. We are one of the biggest crypto-players in Zug and in Switzerland and are even now bringing a large part of our Danish team of crypto-technicians and developers here.

So contrary to leaving Switzerland, we are increasing our Swiss based staff. We certainly do not plan to leave Switzerland, and expect to be able to compete and grow inside the scope of the Swiss jurisdiction. But at the same time, we of course look at all options, also those which are possible out of Liechtenstein.

«The difficulty for crypto-fintechs in finding banking partners»

Does Switzerland need the Crypto Valley so urgently?

I think there is a lot to be gained at the political and economic levels - for example thanks to the jobs that the industry creates and will create, as well as tax payments made directly or indirectly by the industry as well as the individuals connected with it.

In addition to regulatory clarify, politicians should consider helping the industry with the ongoing elephant-in-the-room problem: The fact that the Swiss banks are very conservative and reactionary towards the topic of crypto-assets and crypto-finance, likely because they view it as a risk factor and because they deem the market too small, compared to the risks. This can likely only be addressed in time for saving the ambitions of a ‘Crypto Nation Switzerland’ through political intervention.

How then?

The cantons as part-owners could, for example, induce their cantonal banks to work more closely with the crypto sector as well as the many crypto start-ups - and give the institutions the necessary leeway to do so. The difficulty for crypto-fintechs in finding banking partners is the main reason why the ambitions of Zug's Crypto Valley have not yet been realized.

This will likely not change without political intervention. Accordingly, most fintechs in this area are currently selecting or moving to Liechtenstein or other jurisdictions.

It would be cleaner in terms of regulatory policy if the banks were to enter the crypto-business on their own initiative, wouldn't it?

I have the highest respect for the Swiss banks. But unfortunately, the topic is in my view not taken seriously enough by many traditional banks. On the other hand, it is a small market and I can understand that for many banks, the risks and effort is simply not worth the potential rewards, at least not at this stage.

But with a view to the future, I think that it is now rather than later, Switzerland and Swiss banks should position themselves in the crypto-asset space.

Niklas Nikolajsen is the founder and executive chairman of Bitcoin Suisse, the crypto trading firm. Nikolajsen, a 42-year-old Dane is a software engineer by training and worked in banking, for instance for Credit Suisse. In 2010 he found his true calling in the White Paper of the mysterious bitcoin founder Satoshi Nakamoto. He's lived in Switzerland since 2011 and founded Bitcoin Suisse in 2013. He is one of the main exponents of the Zug Crypto Valley.