In the CoinDesk report, Switzerland’s canton Zug (also known as Crypto Valley) began taking Bitcoin and Ether for tax payments last February this year. According to its website, residents who wish to pay taxes in cryptocurrency will get an email with a link to the cryptocurrency payment option.
Bitcoin, up to this day, remains the world’s largest cryptocurrency by market capitalisation and continues to disrupt traditional finance across many countries. The city of Zug serves as another example of this as it has long been displaying favourable blockchain and cryptocurrency regulations, attracting a large number of businesses.
In this article, we will discuss everything about Crypto Valley and how it came to be.
What is Crypto Valley?
Crypto Valley is a national ecosystem in Switzerland with active ties to global blockchain innovation hubs, including London, Singapore, Silicon Valley, and New York. The term given to the progressive area stretches from Zug, Switzerland’s canton and city, to Lichtenstein. Thanks to advantageous tax legislation, legal stability, and a willingness to explore, the crypto movement has found a natural home in the region. Even before Bitcoin, the region drew a slew of international corporations for the same reasons.
The enormous benefits of global industry clusters — a friendly regulatory environment, efficiency gains, economies of scale, building deep pools of capital and a rich ecosystem of resources and know-how for start-up companies, nurturing an innovation mindset, attracting the world’s best talents, infectious energy, and strong trust relationships that make the impossible possible — inspired the establishment of Crypto Valley.
In January 2017, a non-profit organisation was formed: the Crypto Valley Association (CVA) headquartered in Zug and formed to organise, accelerate, and scale Crypto Valley’s continued development into the world’s greatest environment for crypto innovations and enterprises. Before the formal establishment of CVA, the Crypto Valley in Zug had been initiated by Johann Gevers, who based his crypto finance start-up Monetas in Zug in July 2013.
Bitcoin Suisse, Bussmann Advisory, iprotus, Lucerne University of Applied Sciences and Arts, Luxoft, Monetas, and Thomson Reuters were among the organisation’s initial members.
What are the reasons Zug became Crypto Valley?
Switzerland’s flexible rules and appropriate political structure allow for fresh and creative initiatives, which is one of the country’s benefits. This feature attracts international investors searching for business possibilities in the state. The following are the possible reasons why Zug was eventually coined as “Crypto Valley.”
Having a political system that is progressive and supporting.
Switzerland has a decentralised, stable, and predictable system, which is a crucial setting for the development of blockchain-based projects that may benefit from safe laws. Low taxes and business-friendly laws are further factors to consider, particularly for start-ups.
For international investors, this is a desirable site.
For international investors searching for a place to start a business, Switzerland’s clear legal system and stable economy have been two of the most appealing features. Swiss cantons are essentially trying to attract as much foreign investment as possible by providing various tax advantages, tax exemptions, and typically lower tax rates than other commercial destinations.
Because a large number of international corporations have established offices or headquarters in Switzerland, the country gets significant research funding. Multinational corporations account for around 70% of total research spending and employ 80,000 people in Switzerland.
Having prestigious research institutions.
In both the Swiss economy and its worldwide presence, technology plays a significant role. Courses and events bringing together brilliant students, academics, and blockchain technology specialists are common at Swiss institutions. Some top-tier university academics are frequently active in such technologies, including the creation of Ethereum-based identification solutions. Eth Zurich and EPFL are two of the Swiss universities that are consistently ranked among the finest in the world.
Switzerland’s Zug is one of the best locations for blockchain-based start-ups.
Foreign investments, progressive laws that encourage development across all economic sectors, and top-ranked research institutes have created the ideal environment for the formation of a digital currency centre comparable to Silicon Valley. For the time being, Zug’s Crypto Valley is still in its infancy, but all signs point to it expanding soon.
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