When I first heard about blockchain, I felt like an alien

Crypto Valley was founded in Zug ten years ago. It's not just this organisation that benefits from the steady upward trend of blockchain technology.

Crypto Valley (CV) is now one of the world's most important locations for the Blockchain industry. This was emphasised by all the speakers from politics, education and, of course, blockchain companies who gave information about their activities and points of contact with the CV last Thursday.

Zug Finance Director Heinz Tännler described his first encounter with one of the first players in Zug CV VC (VC: Venture Capital), a private venture capital company, and with the blockchain. He had then just moved from the construction to the finance department in 2016. “I was guided to an event and was fascinated,” says Tännler. “An Indian presenter, many different people from different nations, all of whom had one goal: to create something new and thereby conquer the world.”

CV VC says it has contributed significantly to “building the blockchain ecosystem and is one of the leading investors in early-stage blockchain start-ups.”

Heinz Tännler admitted, however: “When I first heard about blockchain, I felt like an alien.” The fact that he now knows what a blockchain is, how it works, and that it represents a unique opportunity for Zug and Switzerland is primarily due to the patience of the people who explained the whole thing to him.

Enthusiasm seems to be waning
Apparently with success: the Zug finance director has been president of the Swiss Blockchain Federation since 2018. The merger is a public-private partnership that advocates for legal certainty and optimal framework conditions for blockchain-based applications and business models. It has around eighty members, including the cantons of Ticino, Zug, Neuchâtel and Zurich. The Crypto Valley, which stretches from Geneva to Liechtenstein, has around 1,100 blockchain companies working with decentralised applications, and providing more than 6,000 jobs.

While the federal government was initially enthusiastic and removed many of the political and legal obstacles, Tännler is currently seeing a waning of enthusiasm in the Federal Parliament. This in turn creates uncertainties that are unnecessary. Especially with a view to locations like London, which are rapidly catching up with Switzerland and Zug in terms of blockchain friendliness.

Mathias Ruch, founder and CEO CV VC                      Photo: Alexandra Wey

Research for the further development
The current offensive by the Canton of Zug to realise a Blockchain Research Institute together with the University and the Lucerne University of Applied Sciences must also be seen in the context of the competition. The canton thereby wants to use almost CHF 40 million from the income from the OECD minimum tax over five years - provided the cantonal council (Kantonsrat) agrees. For the founder of CV VC, Mathias Ruch, this is a sign that the financial centre is committed to constant further development.

According to Mathias Ruch, it is noteworthy that “many of the world’s leading protocols. such as the Cardano Foundation and Solana Foundation, but also Ethereum, Tezos, Web3 Foundation and Dfinity, have been based in Zug and Switzerland since 2014 ". Protocols are comparable to the well-known operating systems from the traditional world such as Windows, Linux, iOS, he explains. Applications would be built on these platforms and new business models would be developed. “They are creating the infrastructure of the future here.”

More than Bitcoin
Blockchains are chronological data chains. Once linked, data records can neither be deleted or changed. Blockchain technology enables secure, non-manipulable transactions on the Internet. The best-known examples are cryptocurrencies such as Bitcoin.

Blockchain is considered to have groundbreaking significance far beyond the financial sector: it could be used anywhere where a physical trust instance is currently required for data exchange. Examples include the insurance industry, real estate trading, the management of health data or the logistics industry.