Bitcoin startup Xapo has revealed that it has gained an early ‘conditional approval’ from Switzerland’s financial regulator to operate in the country.
Announced by Xapo CEO Wences Casares yesterday, the preliminary approval is reliant on several requirements, including a mandatory membership with the Self-Regulatory Organization (SRO). Xapo is confident that it will meet the requirements to become a member.
Xapo chose the town of Zug (also known as Crypto Valley) in Switzerland as the location for its global headquarters. Switzerland’s international neutrality and its regulatory stability were cited as factors for moving out of California.
Casares wrote:
We are happy to announce that, after almost two years of substantial effort and investment, Xapo has received conditional approval from the Swiss Financial Market Supervisory Authority (FINMA) to operate in Switzerland.
FINMA laid out a number of objectives as a part of its Fintech-friendly agenda in late 2016. Among them is a ‘Fintech license’ to be granted by FINMA, which is also considering regulating the bitcoin industry in Switzerland.
Embracing Bitcoin and Innovation
The bitcoin executive commended FINMA for their transparency and professionalism through the approval process “after almost two years of substantial effort and investment.”
The two-year process was down to product development rather than obstacles due to bureaucracy. “[W]hen obstacles arose, FINMA invariably suggested solutions. We immediately accepted their suggestions when we could and, in other cases, modified or developed products to meet regulatory requirements,” Casares revealed.
Pointedly, he added:
Many regulatory bodies in similar situations would have rejected Xapo (and Bitcoin) entirely. By choosing to persevere, however, we believe FINMA has positioned Switzerland as a hub for fintech innovation and ensured Switzerland’s primacy in global financial services for decades to come.
Switzerland has seen a number of notable developments in the bitcoin space in recent times. For instance, the operator of Switzerland’s national railway service began selling bitcoin via its ticket kiosks in a two-year pilot project. Over a thousand ticketing machines are now accepting fiat Swiss francs in cash or by debit card in exchange for bitcoin. The pro-innovation and technology environment in the country has also led to “Big Four” firm Ernst Young Switzerland to accept bitcoin as payment for its services.
Zug is home to a number of bitcoin and blockchain startups.
The lakeside Swiss town of Zug, where Xapo is now headquartered, announced its intention to continue allowing bitcoin payments for municipality services in December 2016. First announced earlier in May, the pilot program was scheduled to last till the end of the year before the decision was made to make bitcoin payments a permanent option. Further, the recent price rally helped push bitcoin’s presence in the mainstream in Switzerland.
Images from Shutterstock.
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