Everyone talks about it: the Crypto Valley. The origins are in the canton of Zug. A small canton known for both tradition and innovation. A strong financial center that enchants with its lake and the view of the Swiss mountains. And exactly? Passers-by accidentally stopped at the Zug train station are a bit embarrassed as they have never visited Crypto Valley. Sure?
No sign helps with the search, the only thing to be found is the possibility to buy Bitcoin at the SBB (Swiss Federal Railways) ticket machine. If it’s not a place, then what is it? And what does it mean for the actors? The answers are obvious, or better: in a good cup of coffee. Several interlocutors from the administration, teaching and legal services speak about their definition of Crypto Valley, its origin and importance.
“A Focused Ecosystem”
For Alberto Diaz (Deputy Head of the Economic Contact Point of the Canton of Zug and head of the blockchain cluster), Crypto Valley is a “focused ecosystem that focuses on blockchain technologies.” Once a pioneer himself, Alberto Diaz now sees Crypto Valley as “one of the world’s leading dense clusters of blockchain and crypto companies.” It all started in 2014/15 when a delegation of around 20 well-known exponents, including representatives from the Ethereum Foundation, visited Zug. After careful evaluation of the location, the foundation settled in Zug. The Ethereum protocol was then written here. The foundation initially formed a small community, but the location had attracted attention.
Other use cases, layers, and protocols emerged in this rapidly growing ecosystem. The decisive factors for the success of the agreement were the proximity and openness of the municipal and cantonal administration, legal certainty, a democratic form of government and the general business-friendly environment. The authorities played together and saw themselves as enablers. The commercial register, the tax office, the city administration – they all came together. However, it is not only the merit of the city or canton of Zug, where distances are short and, according to Alberto Díaz, a “little thing” makes working together and getting closer so easy.
And Diego Benz (partner, lawyer and notary I Kaiser Odermatt & Partner AG) agrees with this opinion. Without the opening of the entire government and its apparatuses, such as FINMA (Swiss Financial Market Supervisory Authority), this “success story” as described by Prof. Dr. Tim Weingärtner (Lucerne University of Applied Sciences, HSLU) mentions not being able to write. Diego Benz adds that it is the exchange at eye level that allows business activities to flourish. This is also demonstrated by the Drakkensberg project, which he fondly remembers.
This is how Prof. Dr. Tim Weingärtner emphasizes the importance of this exchange and at the same time creates a platform that promotes and challenges it from the heart. According to Weingärtner, the highly interdisciplinary industry benefits in particular from the fact that it finds everything it needs: legal, business developers, IT specialists. A resulting ecosystem grows through trust, which is built through ethical behavior. But Crypto Valley is also a strong brand and all participants must be aware of their responsibility. The role of the HSLU lies in training and higher education with offerings specifically tailored to the needs of the industry. In a nutshell: To Prof. Dr. Tim Weingartner “Community”. As far as the aforementioned “brand” is concerned, care was taken during its creation. “Zug” is deliberately not part of his name.
Zug as the center of crypto strength
Return to the city of Zug. Genuine interest is often difficult to recognize. Not so on the train. From the beginning it was innovative and some groundbreaking projects were implemented. From July 1, 2016, municipal fees of up to CHF 200 can be paid with bitcoins at the resident registration office. Just over a year later, on November 15, 2017, residents of the city of Zug were given access to the digital identity, which was based on an app and operated via the Ethereum blockchain.
And what do users do with it? Of course, vote. Switzerland’s direct democracy requires the participation of its citizens, the voting processes are simply part of it. Since June 25, 2018, people with the right to vote in the city of Zug can do so through a blockchain-based electronic voting system, with their digital ID. Despite all the innovations, the most recent coup in the city of Zug is largely based on tradition. Zug cultivates a cherry culture, which has been proven for 600 years. This includes a wide tradition that, in addition to the “Chriesimärt”, also cultivates the “Chriesisturm” and of course the cherry culture and cherry pie. So what could be more obvious than an NFT collection consisting of 500 unique “Crypro Cherries”?
Beyond the city limits, taxpayers in the canton of Zug can also pay their taxes with Bitcoin from 2021.
The recently published “Swiss Digital Asset and Wealth Management Report 2021” by CVVC AG shows very clearly how Crypto Valley, throughout Switzerland, was able to become what it is today:
Born in Zug, Crypto Valley continues to grow rapidly, beyond the borders of the canton to Zurich, Lugano and without forgetting Liechtenstein, where on January 1, 2020 the TVTG (“Blockchain Law”) came into force as one of the most complete. in the field of DLT/Blockchain but Crypto Valley is no longer just a train. For everyone we are talking to, today it is all of Switzerland and Liechtenstein, that is, two countries and four languages.
Future prospects for the region
And the other side of the coin? Of course looking back, there are always ways to improve something, everyone agrees on that. If opportunities are seized, players who do not pursue ethical intentions are also brought into play. These cases are well known. And instead of criticism, Alberto Díaz mentions challenges that the ecosystem is currently struggling with. This shows that the mentioned “small size” also has disadvantages in addition to the many advantages: Skilled workers are urgently needed, demand can hardly be met despite excellent training opportunities (HSLU, ETH, University of Zurich and many more ), migration processes can be cumbersome Often looking in vain for an affordable space to live.
And the future? How does Crypto Valley stay on top? Exchange! Round tables are held to collect the needs and pain points of all local businesses. An interesting finding from these roundtables is that blockchain companies basically have the same problem as other companies. In the context of these round tables, questions about the future are also raised and addressed.
The passion, which was omnipresent in the conversations, will move this community forward, invites Diego Benz: “It’s the rockiest ecosystem, come and check it out.”
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