Switzerland Approves Crypto Regulations
March 22, 2019 3:00 pm
Switzerland joins the increasing list of countries who have shown a positive stance towards cryptocurrencies. The Swiss Federal Assembly, the government body which is responsible for managing the country’s legislation. The governing body approved a motion of 20th March, directing the Federal Council to regulate cryptocurrencies.
Switzerland has been recognized for years as the prime destination for cryptocurrency and blockchain technology. In fact, Zug, the Swiss down is often referred to as “Crypto Valley”.
Giovanni Merlini, the Liberal Assemblyman will instruct the Federal Council on the adaptation of the existing legislation in order to include and accommodate cryptocurrencies. The motion was approved in the council with 99 to 83 votes in favor and 10 abstentions.
The need for regulations has grown significantly in the past couple of years as the advent of money laundering, extortion, fraud, and criminal activities is growing exponentially. It is also needed to regulate the market activity and rule out the possibilities of price manipulation for both cryptocurrencies and fiat currencies.
Generally, cryptocurrency is not enforced with any regulations which allow the holders of major assets to manipulate the price illegally on the stock market without any repercussions. In fact, the extreme volatility in Bitcoin’s price has been linked to this manipulation by speculators.
As cryptocurrencies are not usually considered as legal tender, crypto scams and price manipulation through bulk buying and selling of assets is difficult to track.
Another major issue is money laundering. Since cryptocurrencies can be bought easily through an ATM, in-person or via an OTC trading. It is easy to exchange these funds for privacy coins on a decentralized exchange for anonymity, making them almost impossible to trace. Unregulated ICOs is another vehicle that facilitates the laundering of funds.
The Swiss banking authority, the Basel Committee on Banking Supervision (BCBS) stated that the crypto sector’s growth could potentially “raise financial stability concerns and increase risks faced b banks.” The BCBS has also called cryptocurrency unsafe and unreliable as a means of exchange or store of value.
Despite the concerns from the banks, the Swiss government is embracing cryptocurrencies with open arms.