Which new ICO started in March 2018
In the past year, companies in Switzerland raised an estimated CHF 850 million with "Initial Coin Offerin" (ICO). This is a new way of raising capital through the use of blockchain. A senior Swiss official denies fears that this new funding method for crypto startups has gotten out of control.This content was published on March 29, 2018 - 4:00 p.m.
If he's not reporting on fintech, cryptocurrencies, blockchain, banking or trade, you can find the swissinfo.ch business correspondent playing cricket in various places in Switzerland - including on the frozen lake in St. Moritz.
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Jörg GasserExterner Link, State Secretary for International Finance in the Federal Department of Finance (FDF) External Link, denies that the ICO industry has turned into a "free for all". He is convinced that the planned regulations can protect the reputation of the Swiss financial industry.
Gasser heads the Federal Blockchain / ICOExterner Link working group, in which the Federal Financial Market Supervisory Authority (FINMA), together with the Federal Office of Justice and representatives of the private sector, is closely examining the ICO landscape. The working group will report to the government by the end of the year.
swissinfo.ch: Some observers refer to the ICO market in Switzerland as the "Wild West".
Jörg Gasser: A 'Wild West'? Not really. First, FINMA has issued recommendations on how to apply the existing laws, in particular those on the prevention of money laundering and terrorist financing. FINMA also takes strict action against fraudulent ICO projects that violate existing laws and regulations.
Second, our Blockchain / ICO working group is reviewing the legal framework in order to identify any possible need for action. However, since our regulation is principle-based, many of our laws and rules also apply to crypto systems and ICOs.
swissinfo.ch: The Swiss Minister of Economic Affairs, Johann Schneider-Ammann, recently called for Switzerland to be known as a 'crypto nation'. Is that feasible and what would it look like in ten years?
J.G .: It's a nice catchphrase, but the term 'crypto' can be misleading. To speak of a 'blockchain nation' or a 'fintech nation' would be more accurate.
What it will look like in Switzerland - or worldwide - in ten years is uncertain. That depends on technological, economic and legal developments. However, if we create the right framework conditions, we can win innovative companies in the long term that create jobs and pay taxes in Switzerland.
Our goal is to ensure Switzerland's competitiveness in the field of blockchain technologies in general without endangering the integrity of the Swiss financial sector.
swissinfo.ch: Disruptive start-ups promise complete change in some areas of the economic and financial system. How much market destruction does that mean for Switzerland?
J.G: New technologies will always find their way into the financial system and destroy existing market structures. This has always been the case and can neither be prevented by the incumbent operators nor by regulations.
However, it is a fact that these new technologies pose a challenge to traditional players. There is no question that they need to use these new technologies to stay competitive. But I am convinced that in the foreseeable future there will be fintech companies as well as traditional financial companies.
swissinfo.ch: Switzerland is considered a conservative country where things are slowly moving. Is Switzerland really the place to be to be at the forefront of the blockchain revolution?
J.G .: Our country has always been open to entrepreneurial innovations. Switzerland offers a stable political system, a liberal economic environment, a highly qualified workforce and a competitive tax system.
Our regulations are principle-based and technology-neutral. All of these factors explain why Switzerland offers the right and innovation-friendly climate for fintech companies.
swissinfo.ch: It is said that cryptocurrencies will give the Swiss financial system new competitive power and will replace the advantage of banking secrecy, which has now been abolished. What is your opinion?
J.G: First, the Swiss financial sector is still very competitive. We are still number one worldwide in cross-border private asset management. However, it is a fact that the blockchain technology that underlies most cryptocurrencies is leading to structural change and disruption.
But digital innovation can also make the financial system more efficient. As a small, open economy, Switzerland can only be successful if it is constantly innovative. And this is where our strengths such as political security, legal security and high-quality services can help us successfully master these challenges.
What are ICOs?
Initial Coin Offerings (ICOs) - also known as Token Gathering Events (TGEs) - are a relatively new form of capital raising for companies. Startups issue digital tokens for 'contributions' (mostly in the form of cryptocurrencies like Bitcoin) to fund their projects. Instead of giving company shares or dividends, these tokens in many cases simply enable the use of the new technology - which is often not yet built.
The ICOs kicked off in 2017 and raised an estimated $ 4 billion for blockchain startups worldwide. This rapid growth has alarmed market regulators in many countries. There are three concerns about ICOs: that the crowdfunding system can in some cases be used to firstly launder illegal assets, secondly to circumvent financial regulations such as securities trading regulations or thirdly to rip off unwary consumers with scams.
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