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Author of Crypto Nation Switzerland, available at the end of the year, former banker Alexander Brunner wanted to understand how a small country such as Switzerland could become a global blockchain leader. Interview.
“When I was a student, everyone wanted to work in finance. That’s no longer the case today. Young people want to launch their blockchain start-ups. Banks are boring to them.” Being a very versatile person, Alexander Brunner followed this path. After working for hedge funds, he left the finance world to pursue blockchain technology. With an office in Trust Square, Brunner is currently finishing his book on the subject. He is also a politician, as a member of parliament in the city of Zurich representing the FDP.The Liberals.
Switzerland is often seen as one of the top three countries in the world for blockchain. Is that correct?
There is no doubt that something significant is happening in our country. The larger public only recently started hearing about cryptocurrencies and blockchain technology, with the Bitcoin surge in late 2017. But the blockchain Ethereum, which is the basis for the cryptocurrency Ether, was started in Zug as early as 2014. Since then, we have seen the arrival of the Crypto Valley Association in the canton of Zug (a term practically branded since 2014), then Trust Square in Zurich. Together, they created an ecosystem conducive to blockchain development in Switzerland.
As a result, 40% of the 15 biggest ICOs overall, since 2016, took place in Switzerland. Given the size of our country, this is pretty remarkable. It puts us among the world leaders in blockchain. Now, experts from all over the world come here to see what we’re doing. I believe politicians – and I am one as a member of parliament in the city of Zurich – have a good understanding of the challenges and the importance of blockchain, because they have supported and encouraged this phenomenon. In January 2018, for example, federal councillor Johann Schneider- Ammann declared he wanted to make Switzerland a “Crypto nation”.
How do you explain Switzerland being at the forefront of this industry?
Luck! (Laughs.) One thing is certain: it’s not a political initiative. At the beginning, pioneers such as the Dane Niklas Nikolajsen, founder of broker firm Bitcoin Suisse, decided to settle in the canton of Zug as early as 2013. They came here motivated by the political and fiscal stability of our country, as well as the presence of a strong financial centre. These pioneers then convinced Russian- Canadian genius Vitalik Buterin to also choose Zug as the place to launch his Ethereum project.
All of this created a first ecosystem: Crypto Valley. The city of Zug itself played a role. The local government encouraged this phenomenon by welcoming it from the very beginning. I think the fact that Switzerland is one of the global blockchain leaders is because chance led the right people to the same place at the right time.
Will Switzerland’s advances last?
No one knows. Several countries such as Liechtenstein, Malta, Cyprus and Estonia are making a lot of progress. In comparison, Switzerland has many advantages, notably because it was one of the early adopters and has a strong economic community. Furthermore, the regulatory body became involved quite early. The financial market supervisory authority (FINMA) was the first in the world to publish guidelines to oversee ICOs in February 2018. So we’re in a very good position. But at the same time, we must remember that Switzerland is a small country. If giants such as the United States really make progress with blockchain, they will quickly outpace us.
It’s also kind of a shame that the big Swiss banks aren’t more interested in the technology. For the moment, they have a “wait-and-see” approach, as they are concerned by potential US reactions. Indeed, Switzerland is part of a global financial system that is dominated by the United States. The US has a very strict security law regarding all ICOs as security offerings. Therefore, for Swiss banks with a strong US presence, it could be risky to dabble in cryptocurrencies without an in-depth review of US law. Faced with this threat, Swiss banks prefer to wait. I think that’s a shame.