Switzerland has established itself as a center of digital innovation, particularly in the field of cryptocurrencies. The city of Zug, known as the Crypto Valley, is home to numerous companies leading the way in fintech and blockchain development. The country’s strong regulatory framework ensures the security and privacy of stakeholders, making it a prominent player in the crypto innovation landscape.
According to the Henley & Partners Crypto Adoption Index report for 2023, Switzerland ranks second with an impressive score of 46.9%. The country performed well in categories such as innovation and technology, regulatory environment, and economic factors.
But is Bitcoin legal in Switzerland? The answer is yes. Swiss regulators recognize Bitcoin as a legal asset or property, allowing exchanges and digital currency platforms to operate within the country once they obtain the necessary permissions. However, any gains made through Bitcoin are subject to income tax for corporations and professional traders, or wealth tax for individuals.
Switzerland has implemented laws to govern virtual asset service providers (VASPs) and ensure security and transparency in the crypto industry. VASPs must comply with the Financial Services Act (FinSA) and the Anti-Money Laundering (AML) Act, implement Know Your Customer (KYC) processes, conduct thorough customer due diligence, register with the Financial Market Supervisory Authority (FINMA), and adhere to strict reporting guidelines.
To be considered a professional VASP in Switzerland, an organization must meet certain criteria: generate a gross revenue exceeding 50,000 Swiss francs per year, establish business relationships with more than 20 contractual parties in a year, exercise control over third-party funds totaling more than 5 million francs, and execute transactions with a total volume surpassing 2 million francs annually.
Switzerland’s banking sector has also embraced cryptocurrencies and blockchain technology. Swiss banks offer various cryptocurrency products and services, including trading and brokerage services, integration of cryptocurrency in investment portfolios, custodial services for institutional investors, and the development of crypto-related investment funds and structured products.
Many Swiss banks have implemented blockchain technology to enhance their operations. For example, Cantonal Bank uses blockchain to diversify revenue streams and attract tech-savvy customers. Falcon Private Bank, Julius Bär, and Vontobel banks cooperate with cryptocurrency experts to provide trading and asset storage services.
So, how can you buy Bitcoin in Switzerland? There are several options available. Cryptocurrency exchanges, both global and local, allow residents to trade various cryptocurrencies. Users must choose a secure exchange, create an account, fund their account with Swiss francs or other recognized fiat currencies, place an order, verify the details, and store the purchased Bitcoin either on the exchange or in a private cryptocurrency wallet.
Bitcoin ATMs, or BTMs, also provide a way to buy Bitcoin using cash. These ATMs allow users to deposit cash, choose their preferred cryptocurrency, and receive coins of equivalent value in their chosen wallet. Switzerland has over 130 Bitcoin ATMs, with Zurich being home to almost 40 of them.
Peer-to-peer platforms enable users to buy or sell Bitcoin directly with another person on a platform. Users must choose a credible platform, register an account, find sellers that fit their requirements, open a trade, discuss terms, and finalize the transaction.
The Swiss Federal Railways also offers a unique way to buy Bitcoin through ticket vending machines. Users need a Bitcoin wallet and a Swiss mobile phone number to access the crypto-enabled machines and make cash-based Bitcoin transactions. However, these services come with high fees, ranging from 6% to 14%.
As for spending Bitcoin in Switzerland, the adoption of cryptocurrencies is steadily increasing. Many restaurants, shops, and luxury boutiques in Zurich and Geneva accept crypto payments. Lugano has de facto adopted Bitcoin as legal tender, with renowned brands like McDonald’s, Rolex, and Lamborghini accepting BTC as payment. Online merchants and service providers across the country also offer BTC and other crypto payment options.
When it comes to storing Bitcoin, security is crucial. Assets can be stored offline in cold wallets, such as USB drives or paper wallets, to protect them from online threats. Cold wallets are disconnected from the internet, making them a preferred choice for long-term storage.
Switzerland’s positive approach to digital currencies has provided users with a range of options for buying, spending, and storing Bitcoin and other cryptocurrencies.