The financial sector is grappling with a new wave of digital technology that could transform personal finance and institutional trading around the globe.

Matthew Allen

Skizzomat (Illustration)

The coronavirus pandemic has further highlighted the world’s reliance on an increasingly complex digital infrastructure.

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Facebook-backed digital currency project to leave Switzerland

This content was published on May 13, 2021 May 13, 2021 The Facebook-backed digital currency project formerly known as Libra, now called Diem, says it is shifting operations from Switzerland to the US.

At the cutting edge of change is distributed ledger technology (DLT) - or blockchain - that aims to change the way currencies are created, owned and transferred.

Rarely has a proposal raised so much expectation and scepticism.

In Switzerland, it has led to soul-searching. The country’s storied banking sector sees itself at risk of being uprooted by new forms of digital currencies that circumvent traditional money flows.  They also see great promise: could digital currencies lead to a revival of personal banking, allowing a greater number of people access to more efficient financial services? 

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Explained: The technology behind bitcoin and blockchain

This content was published on Apr 22, 2019 Apr 22, 2019 To some, it’s a load of hot air. Others see a revolutionary technology that will transform the way we exchange nearly everything of value.

Switzerland has a lot to gain – and to lose – from the way in which this is done. The country manages more than $2.3 trillion (CHF2.07 trillion) in offshore wealth, more than any other nation, according to the Boston Consulting Group. That equals a third of estimated known overseas assets globally. But it also matters for Switzerland. About 10% of the country’s economic output comes from the financial sector.  

The arrival in Geneva of Facebook’s cryptocurrency project Libra was a watershed moment. Under enormous international political pressure, Libra changed its strategy, its name to Diem – and then left Switzerland for the United States.

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How Swiss banks are bouncing back

This content was published on Jul 31, 2019 Jul 31, 2019 Banking secrecy is over, but Swiss banks are still managing to attract large flows of capital from other countries.

Diem leaves behind a regulator that is getting to grips with a new breed of assets, legal updates that incorporate DLT into Swiss financial and company laws, and a central bank contemplating the creation of a digital version of the franc.

The financial regulator frequently spars with the crypto upstart community on how to protect small investors in the promised new world of digital finance. It has also awarded licenses to financial players specialising in crypto assets. 

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Swiss financial sector shines in international survey 

This content was published on Aug 13, 2019 Aug 13, 2019 Switzerland’s financial centre has a positive reputation abroad, despite a string of scandals in 2018, according to a 19-nation survey conducted by...

What these actors agree on, however, is that Switzerland needs to be a global leader in the crypto and blockchain spheres. If that chance is missed, some fear it would disrupt Switzerland’s place in global finance, with digital assets flowing to other countries. 

Several hundred start-ups are backed by incubators, consultants and legal teams. The country is also home to specialist foundations that house the significant assets of some of the world’s leading blockchain projects. 

I have been closely following the emergence of this scene over the last years. Subscribe to my newsletter to keep in touch on latest developments. 

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