Liechtenstein lures blockchain companies from Crypto Valley

Liechtenstein is the first country in the world to have embarked on legislation relating to blockchain technology and in so doing is encouraging companies from Crypto Valley in Zug to move there.

The new legislation, once enacted, will mean that all-important legal certainty for such businesses will be in place. Furthermore, new regulations relating to client protection will come into force and any possible risk of damage to the principality’s reputation will be limited. The term “token”, as used in the initial coin offering processes when new crypto currencies are set up, will have its particular meaning in this context anchored in Liechtenstein law. This compares with guidelines only as issued here by the Swiss Financial Market Supervisory Board (Finma).  

The very fact that new legislation is in the pipeline has already been enough to entice some companies from Zug to move the centre of their operations to Liechtenstein. Indeed, as Adrian Hasler, the head of the Liechtenstein government, mentioned, over 100 companies using blockchain technology have made enquiries about setting-up business there.

Keeping a close eye on developments in this area in the principality is Arthur Vayolan (photograph), who has been CEO of the Zug-based Bitcoin Suisse since November of 2017. It was only recently that the company celebrated the fifth anniversary of it being set up, hence it is the “oldest of Switzerland’s crypto businesses” as he referred to it. Originally set up by Niklas Nikolajsen as a crypto currency exchange, the company now offers a range of services in this sector. While 20 people worked for it in 2017, now this number has risen to 65, with 35 more expected to join them. “The company is viable with shareholders who look to the long term,” said Vayolan.

There is no doubt that Bitcoin Suisse and the founder of Etherium, Vitalik Buterin, have done much to foster the establishment of Crypto Valley in Zug and make it known abroad. What has been striking, however, has been a recent statement made by Bitcoin Suisse and published in the renowned economic Handelszeitung journal, namely that the crypto industry is no longer fixed on Zug as a location, bearing in mind the sluggish progress relating to blockchain reforms.

Reacting to this, Vayovan said he had the impression that while “Switzerland tolerated us, Liechtenstein laid down the red carpet for us”, adding that while Switzerland had done all the pioneering work with regard to Crypto Valley, it now risked losing it. He then went on to quote a former federal councillor who once said, “The Swiss get up early but only wake up later.”

Vayolan, a former Credit Suisse banker, did not deny that the canton and city of Zug had always acted proactively when it came to support for crypto currencies and accused the federal (state) authorities for their sluggish response. “I cannot imagine us leaving Zug, but I can well imagine setting up a branch in Liechtenstein, too,” he said, pointing out that, unlike Switzerland, Liechtenstein was a member of the European Economic Area, which meant easier access to the European Union.

In the meantime, the federal authorities have reacted and are expected to publish a report with regard to regulation of companies using blockchain technology by the end of the year. However, for many involved in the crypto scene, this is too late, with the new law in Liechtenstein possibly being enacted as soon as summer of next year.