Switzerland has embarked on a mission to create a more vibrant Fintech industry. The country has recently made decisions to change laws that prohibit
Switzerland has embarked on a mission to create a more vibrant Fintech industry. The country has recently made decisions to change laws that prohibit and limit the dynamism of the Fintech market by amending various Banking laws. By doing this, the country hopes to create a more aggressive market.
The structure tasked with making regulations concerning the Fintech market, the Federal Council, has previously looked for various ways that it could change the market to match the country’s Fintech goals. To this extent, the country’s financial department was given the mandate to look for proper strategies that would position Switzerland as a prime Fintech destination. Some of the proposals by the Swiss financial department involve completely altering the nature of some existing laws. The changes will especially affect Banking laws. The expected changes involve:
Extending the period that money can be held in a settlement account from one week to up to two months. This is a sharp change from the past where the difficulty level of planning was increased due to the short time allowed by the law. In essence, the extended period allows companies to make comprehensive plans.
Removing the financial barrier for startups where they will be allowed up to CHF 1 million without being regarded as operating for commercial gain.
Removing bureaucratic barriers by making the legal and authorization process easier such that it is in line with the banking license. This means that companies will get a deposit protection if they are not involved in any lending activities, and can also get public resources to the tune of CHF 100 million. There will also be a need to lessen the regulations guiding minimal capital so as to truly propel Switzerland into a Fintech hub.
All these regulations are in line with Switzerland’s vision of being a global leader in Fintech and all financial technologies of the future. The measures will also definitely change the scope of the market by increasing the business activity within Switzerland as well as elevate its position in the world. This is especially since the country has been explicit about its intentions to embrace bitcoin.
Taking the dynamism of Fintech into account, the Federal council has expressed the need to adjust future regulation that touches on:
Future dynamics of the financial technologies. In essence, the body will maintain a keen interest in all developments such that necessary changes are made along the way. Switzerland has already started reaping the benefits of its innovative regulations as some companies have already expressed their intentions of investing there.