CVA Says Switzerland Is Losing Ground to Other Countries
The newly elected president of the Crypto Valley Association says Switzerland has lost its appeal to blockchain businesses. He wants the CVA to ramp up their lobbying efforts.
The Swiss city of Zug, home to crypto and blockchain development hub “Crypto Valley,” has been ranked the fastest-growing tech community in Europe by Swiss startup news channel StartupTicker. But the Crypto Valley Association (CVA) doesn’t share the positive sentiment.
The recently elected president of the CVA, Daniel Haudenschild, said in an interview with major local media outlet Swissinfo, that Switzerland is “losing ground to other countries.”
Crypto Valley suffers from crypto bear market
Haudenschild explained the Crypto Valley has suffered from the ongoing crypto bear market, which has damaged Switzerland’s position as a global blockchain hub. It has created a “capital gap of billions of francs.” He also said that “great ideas are being shelved because they can’t find that funding.”
He’s not wrong with that. Firstly, the crypto crash has somewhat damaged the reputation of the industry and raised concerns amongst investors. Secondly, many companies kept a portion of their funds in digital assets, whether in their own tokens or in Bitcoin and Ether. As prices collapsed by more than 90% over the last year, their funds thinned out, leaving companies underfinanced.
Switzerland-based crypto investment firm CV VC has reported that the number of blockchain companies in Switzerland had grown by 20% in Q4 2018. However, the market capitalization of Switzerland-based blockchain firms has been reduced by more than 50%.
CVA to ramp up lobbying efforts
Prior to joining the CVA, Haudenschild resigned from his role as CEO of the blockchain advisory unit of Swiss state-owned telecommunications company Swisscom in January. According to SwissInfo, he was elected president of the CVA following “a period of unrest that saw claims of profiteering and sharp practices.”
More than half of the members of Switzerland’s Crypto Valley Association (CVA) board have announced their decision to step down in January. The news came after reports about governance issues and allegations of “conflicts of interest” in the leadership of the organization.
The new CVA president announced that he intends to bring changes to the organization, in order to attract more blockchain projects to Switzerland. He stated that “there will be a zero-tolerance approach to people who try to enrich themselves on the back of the CVA brand.”
Haudenschild also criticized the organization for having stopped lobbying the Swiss parliament. While other countries like Liechtenstein are moving ahead with crypto-friendly regulations, Haudenschild thinks Switzerland lacks behind.
“We need a change in our laws and that requires more interaction with lawmakers and regulators. We need to make Switzerland open and easy for companies to invest in blockchain projects,” he says.
He pointed out that Switzerland is not doing enough to attract the venture capital, entrepreneurs and skills needed in Crypto Valley. “If we don’t do that, capital and talent have legs, and we already see it seeping out. I couldn’t get five venture capitalists around a table in Crypto Valley right now. They have moved on to London, Amsterdam, and Berlin,” says Haudenschild.
Although the Crypto Valley faces challenges, it’s also not all gloomy. Switzerland has a positive reputation among investors and is seen as a top-spot for blockchain companies. But Haudenschild also has a point. The industry is still young, and governments are competing for the best businesses and talents. Now is a crucial time. Switzerland cannot afford to sit back and rest on their laurels.