Two of the most welcoming countries in the world in terms of Cryptocurrency and Blockchain, Israel and Switzerland have partnered up to tackle issues related to financial technology regulation, cryptocurrencies, market access and to fight against money laundering and terrorism finance. This collaboration brings two of the world’s most sophisticated fintech markets closer.
A few days ago we reported the possibility of the same as Switzerland’s finance minister, Ueli Maurer, and the head of its state secretariat for international financial matters, Jörg Gasser visited Israel. Following the announcement, a series of interviews conducted by Euromoney, reveals that cryptocurrency businesspeople have applauded the collaboration and believes that this action will serve as an example for other leading regulators to up their game and foster new financial technologies.
Uriel Peled, the co-founder of public blockchain Orbs, from Tel Aviv told the publishing that Israel can learn from Switzerland’s initiatives to better the cryptocurrency eco-system in the country. He further states that Israel still lacks strong banking and anti-money laundering laws, which hinders market growth. According to him, Switzerland has an advanced system for the aforementioned and Israel could probably adopt a few pointers.
Peled also elaborated what Switzerland can take from Israel, he points out that the latter is a pioneer in drafting tax laws favorable to the development of the market. For instance, Israel views virtual currencies as financial assets and subject them to capital gain taxes, of up to 25%.
When the publishing asked Angel Versetti, chief executive and co-founder of Ambrosus, a blockchain ecosystem with offices in Zug, Switzerland’s bitcoin capital, about Israel’s learning from Switzerland over handling crypto-businesses he explains that the country has both talented people in the sector and numerous programmes for startups.
In saying so, he also added that the companies active in this space face optimal situation thus far and many are questing if the support is correctly provided and would they be able to continue to operate in Switzerland? Versetti noted that the initial boom of crypto-projects and initial coin offerings has slowed down and many are fleeing the country due to a less attractive environment caused by the poorly thought-out regulation and opposition from incumbent financial institutions.
He further points that up until recently, firms from Israel were running their initial coin offerings abroad, often in Switzerland, but now the ICOs could be more likely home or spread to other jurisdictions, such as Liechtenstein, Gibraltar or the Cayman Islands. Versetti reiterates Peled’s sentiment that Switzerland might learn from Israel’s tax laws. He claims that Swiss laws are hurting Crypto-traders, for instance, bitcoin holders paid taxed over the value of their holding last year, at a time when the values were high since then their value has more than halved since then. Implying that the tax amount paid surmounted the current value of their bitcoin holdings.
On the topic of anti-money laundering rules, Versetti bemoans both the country and states that most cryptocurrency firms face difficulty applying them as they “unnecessary expenses” for startups. He explains that firms in both countries struggle to acquire or maintain relations with licensed banks and thus leave themselves vulnerable to potential money-laundering risks.