Once in Switzerland, you will find yourself in the capital of the cryptocurrency world in Europe. How legal is crypto-currency in Switzerland?
Switzerland is considered one of the most cryptocurrency-friendly countries in Europe. However, few people know how highly developed the crypto industry is in this country. Cryptocurrency in Switzerland has a good regulatory base, which any country can envy. What rights and obligations regarding cryptocurrencies can I count on when I get to Switzerland? We will analyze in more detail in the article.
To begin with, it is worth figuring out what status the cryptocurrency has in Switzerland. Compared to many other states that seek to somehow restrict or even ban cryptocurrencies, Switzerland is considered a crypto-oriented country. In Switzerland, almost any activity with cryptocurrency is allowed. It is important to emphasize that bitcoin does not have the official status of a legal coin, such as in El Salvador. Of course, bitcoin is not paid everywhere on a par with the Swiss franc.
However, there are many companies, retail chains, and even government agencies that may accept your bitcoin as a good or service. Let’s take a closer look at each area. What can be done with cryptocurrencies in Switzerland at the federal level? Switzerland is a federal state and is divided into many regions – cantons.
Each canton also has its own policy towards cryptocurrencies. As a result, it depends on the location whether it is possible for you to do this or that manipulation with digital assets. Let’s start with the general, federal level of legislation. There are 3 main rules on which the Swiss legal framework is built:
Legitimacy ,Transparency, Compliance with the rules of identity verification. In addition, throughout Switzerland, you can: Buy, Sell, Trade, Store cryptocurrency.
Profits from the purchase and sale of cryptocurrencies are subject to federal capital gains tax (about 7%). Taxes are also paid within the cantons (from 6 to 12%). In addition, throughout the country, you can safely purchase cryptocurrency at ATMs or railway cash desks. Some stores and department stores accept certain cryptocurrencies as payment (Lehner Versand).
Cryptocurrency in Switzerland: regional level of regulation
Some cantons have gone a little further in regulating the crypto industry in Switzerland. For example, let’s look at the canton of Zug. This canton is considered the most crypto-oriented. There are many crypto organizations located there and ideal conditions for the existence of traders and businessmen have been created. For example, since 2016 in this canton you can pay for electricity and water in bitcoin. And recently, they have been allowed to pay all state taxes in “digital gold”. In Zug, it is allowed to create companies with authorized capital in bitcoin and much more.
Cryptocurrency mining in Switzerland
Cryptocurrency mining also has an official status and is taxed. Interestingly, only the industrial mining of cryptocurrencies is subject to capital gains tax. That is, if a person or organization creates a large mining pool and mines cryptocurrency at this level, then the tax must be paid. At the same time, home local mining is considered a hobby and is not taxed.
Can companies work with cryptocurrencies?
Various trading companies and platforms are authorized to accept payments in cryptocurrencies. However, this usually does not require a special permit or license. However, both parties (buyers and sellers) are required to complete identity verification (KYC) and procedure (AML – anti-money laundering). This is done to ensure the safety of the seller and the client and to prevent the use of cryptocurrencies in illegal activities or terrorism.
Also, if a company accepts money from a client in cryptocurrency and manages it, then it must obtain a special banking license from the regulatory body (FINMA).
Cryptocurrency in Switzerland and its storage
You can also store cryptocurrencies in Switzerland. Therefore, there is a great demand for reliable bank vaults. Services for custodial storage for those who want to securely protect their cryptocurrency in Switzerland are provided not only by banks, but also by commercial companies.
In order to provide custodial storage services, it is necessary to obtain approval from the FINMA regulator. Especially for commercial companies. Sometimes the storage of digital assets is also provided by the “Financial Services Act (FinSA)”.
Suppose a client has the right to conduct transactions with cryptocurrency or tokens through special custodial accounts. This means that the company is obliged to comply with the rules and regulations defined by this law “FinSA”.
Is it possible to open a company with authorized capital in Bitcoin?
Switzerland boasts another unique opportunity: the creation of a company with an authorized capital in bitcoin. When creating any company, you need to deposit a certain amount of funds into its account, only after that it will receive the status of GmbH or AG (analogues of various forms of enterprises, just like in Germany). The sums are not small and should be equal to 20,000 francs in the first case and more than 100,000 in the second.
If your company is connected with the cryptocurrency business, then it will be extremely convenient not to withdraw all your funds from cryptocurrency to fiat, but to transfer the equivalent to your company’s account directly in bitcoins. This procedure is not so quick and simple, but the very fact that it is possible is very surprising. This gives hope that in the future there will be such opportunities in any country in the world, and it will no longer be necessary to constantly convert cryptocurrency into fiat money and vice versa.
Summing up the development of the crypto industry in Switzerland
As a result, we can say that the cryptocurrency in Switzerland has a semi-legal status. You can do almost any manipulation with cryptocurrency, just not everywhere and sometimes in a limited format. Switzerland did NOT legalize bitcoin and cryptocurrencies, as El Salvador did, but at the same time correctly regulated them. Switzerland has secured itself against the risks of volatility and unsuitability for everyday settlements in bitcoins and other cryptocurrencies, but at the same time has greatly developed the structure of digital assets.
The government has managed to find a balance between full legalization and associated risks, between moderate regulation and an abundance of actions that citizens of a country with cryptocurrency can do absolutely legally.