Blockchain
Switzerland is unanimously considered a pioneering country in the cryptocurrency sector.
Already in 2013, the first startups were founded that planned to focus their business on crypto.
At that time, there was no legislation to ensure complete legal certainty, as digital currencies were still completely unknown not only to the masses, but also to insiders.
The federal government immediately positioned itself as an extremely innovative location and took a business-friendly approach to Crypto startups eager to establish themselves in the Alpine nation.
The Swiss authorities issued the first banking licenses for crypto banks in 2015.
This allowed Blockchain and Fintech startups to continue to establish themselves in Switzerland, leading to the birth of the famous ‘Crypto Valley’.
The city and canton of Zug in the heart of the unparalleled “Crypto Valley” since 2016
The city of Zug is a pioneer in the Blockchain and Crypto scene and continues to attract new businesses to the sector, a circumstance that puts Swiss Square among the top three jurisdictions in the world for innovation and security in the crypto space. universe.
Consider, for example, the evolved cross-border payment system, or the security of the custody of crypto assets at Swiss crypto banks.
Also consider the many companies that develop applications based on blockchain and the tokenization of real assets.
In 2016, the municipality of Zug decided to accept Bitcoin as a means of payment for some services.
Since 2020, the cantonal tax authority also allows people to pay their tax bills in Bitcoin and Ethereum up to a maximum amount of 100,000 Swiss francs.
Two years ago, the “Blockchain Law” as well as “distributed ledger-based securities”
As of February 1, 2021, the Swiss “Blockchain Law” initially included elements of the Distributed Ledger Technology (DLT) regulation, allowing the introduction of a new category known as “distributed ledger-based assets”.
Distributed ledger-based assets as a new form of collateral were included in the Swiss bond code.
Section 973d defines distributed ledger-based assets as an entitlement uploaded to a “ledger” that can only be enforced through the ledger itself.
Therefore, according to the innovative Article 973d CO, if permitted by a company’s Articles of Association, assets such as stocks can be issued as ledger-based assets and “uploaded” to a blockchain.
Thus, instead of holding the securities in paper or electronic form, there is the option of uploading them in digital form to a Blockchain, an operation that has several advantages.
Stock tokens therefore contain exactly the same rights and obligations as “traditional” shares.
In much the same way as a company’s stocks and bonds, ledger-based assets can be representative of physical assets in the real economy.
Long range of tax, visibility and internationalization benefits through inventory tokens
Asset tokenization is a common practice in the Swiss financial market.
It is legally guaranteed by existing legislation through the Swiss Federal Financial Market Infrastructure Act (FinfraG).
Traders can contractually link assets (bonds or stocks) to a token so that the asset and the token cannot be independently transferred.
The tokenization of shares allows companies and investors to achieve these benefits: create liquidity for their shares; creating interest/visibility in the market, generating potential appreciation of the stock itself; making an investment accessible to the general public that was not previously available, stimulating sectors of the economy previously little known internationally; and enjoy tax benefits, depending on the jurisdiction of residence, associated with token ownership.
Investments in classic cars, wine collections, art and watches more democratic and lucrative
The same tokenization operation can be performed with other types of real world assets such as vintage cars, wine collections, various works of art, and watches.
What do these assets have in common? They are illiquid and inaccessible to the general public.
How can the average investor invest in a Picasso, a fine nectar, a Patek Philippe, a private jet?
Through asset tokenization, it is possible to digitally divide assets into many small fractions of equal value.
Hence, even the small investor has access to the market.
The liquidity creation that underpins tokenization democratizes luxury markets, areas that very rarely generate capital losses.
Therefore, the retail investor receives tokens representing that asset in his or her wallet and can hold or sell them on a specific crypto market in an onshore or offshore jurisdiction of his or her choice, analogous to owning shares and selling them on a trading platform .
On the seller’s side, the chances of selling an illiquid asset increase significantly compared to finding a unique buyer in the luxury market.
An operation that requires more time and resources and is likely to generate less revenue than tokenization.
Finally, we can assess an interesting tax aspect, which depends solely on the tax residence of the investor.
In fact, holding tokens offshore should not be taxed, either on the content or on any capital gain…
DIDA
Tokenisation: the text of Article 973d of the Code of Obligations of the Swiss Confederation (in English)
Tokenisation: The city of Zug pioneered the Blockchain and Crypto scene in Switzerland and is still attracting new companies to the sector
Tokenization: Under current Swiss law, share tokens contain exactly the same rights and obligations as “traditional” shares
Tokenization: A cryptocurrency is a digital currency that, unlike traditional currencies, does not exist in physical form and is not controlled or controlled by a central authority
Tokenization: Blockchain is a data structure made up of growing lists of registers called “blocks” and distributed, securely linked together using cryptography
Tokenization: Asset tokenization represents an alternative and innovative way to achieve fractional ownership of an asset
