Skip to main content

Accurity Blog

The terms Fintech and Blockchain might cause some readers’ eyes to glaze over, while subject aficionados on the other hand, will revel in the atmosphere in greater Zurich and the canton of Zug, where some of the world’s most exciting Fintech and Blockchain start-up projects are taking place.

Host to the so-called “Crypto Valley” – the Canton of Zug is now home to over 430 blockchain focused start-ups including the largest distributed ledger system worldwide.

What exactly is blockchain and why is it so important? 

  • One simple definition of blockchain is that it is a distributed ledger, secured by cryptography. And as the name suggests, it is a record composed of a series of blocks, organised in a chain.
  • Blockchain technology is seen as a better, safer way to record activity and keep data updated, maintaining an accurate record of activity history. To illustrate its role in ICT, annual spending on blockchain solutions is predicted to reach USD 19 billion by 2024.
  • Although blockchain technology was specifically developed for Crypto Currencies, other industries where blockchain technology is now used include: automotive, insurance, banking and financial services, governments, healthcare and life sciences.

The Canton of Zug has a leading Global development role

  • About 5% of Swiss start-ups are based in the Canton of Zug, ranking it 3rd among other cantons in Switzerland in terms of start-ups, mainly applied to fintech and located in the Crypto Valley.
  • With a high survival rate for start-ups of 80% in the first year and 50% reaching their fifth anniversary, the Canton of Zug offers an ideal setting and economic climate for start-ups.
  • The authorities in Zug have gained a reputation for being pragmatic and service oriented. It is centrally located in Switzerland with a highly rated infrastructure and high quality of life.
  • Companies from several sectors, including the world’s leading blockchain crypto currency start-ups are now operating from the Canton of Zug. These include Ethereum, Cardano and Polkadot – some of the largest and most revered projects globally.

IBM predicts blockchain technology will grow significantly in popularity, especially among financial institutions, and that 66% of Financial Institutions will soon have blockchain technology in production.

However, the future of blockchain is not only linked to the financial sector: entrepreneurs believe the technology can be used in many other industries, wherever transactions take place. Deloitte Switzerland has developed an analysis matrix and pointed to four sectors having a pioneer role: financial services, logistics, insurance and healthcare. This means that blockchain is set to transform these sectors as well. Some examples:

  • In financial services / cross border payments: by eliminating red tape and giving ledger systems real-time capability (and thereby reducing third-part fees), blockchain technology can save banks billions each year.
  • In the logistics sector: Modum, a Pharma focused company based in Zürich, offers blockchain-enabled products that manage the production and shipment of medicines – monitoring temperatures during the journey to ensure that medicines arrive safely and on time. Modum raised more than USD 13 million in its token sale in 2017
  • Insurance industry: AXA is the first all-insurance company in Switzerland to offer its policyholders the option of paying bills in Bitcoin. Thereby investing in digital development and responding to growing customer demand for more freedom of choice in payment transactions.
  • In 2018, the blockchain initiative “B3i” announced the formation of a blockchain start-up in Zurich: “B3i Service AG” (Allianz, 2018). With this, B3i Services AG aims to commercialise blockchain solutions for re-insurance.
  • Healthcare: Novartis a leading health care company based in Switzerland recognised the value of so called “smart” contracts which is also a blockchain application and agreements between two parties are now registered on blockchain.
  • Swiss Digital Health (SDH) is a platform that aims to connect the digital health community with a goal of improving the global healthcare system. SDH cooperates with companies such as Digipharm which focuses on fair pricing in healthcare – using blockchain technology.

What started out as a tool solely for use with crypto currencies – to enable secure, safe and trackable purchase transactions, blockchain technology has now transcended other sectors where proof of ownership and traceability also play a key role.  And with new sectors using blockchain technology outside of fnance, the future of blockchain seems positive. As the market for blockchain technology grows, so do the legislations surrounding it.

In Switzerland on 1 August 2021, the “DLT” Act for developments in the technology of distributed electronic registers came into force. This framework comprises a series of amendments to existing Swiss federal law around financial regulation, banking law etc., and is highly detailed with respect to crypto currencies. This was followed by the OECD 2021 Blockchain Policy Forum which discussed policy best practices specifically for cross-border co-operation and stronger global governance.

Skilled workers

Fintech and blockchain are here to stay, and Switzerland has been quick to establish itself as a key player in developing the technology for opportunities in several sectors outside  finance. As the momentum of blockchain gathers pace, the question: will Switzerland have enough skilled workers to fill all the vacant positions? is being raised.

It is estimated that by 2028, Switzerland will need more than 117’000 new skilled workers in ICT. The demand for talent is also evident in the Crypto Valley in Zug where Blockchain expertise is required in high volumes. To fill this demand at least in part, the training company TIE International has now founded Switzerland’s first blockchain apprenticeship scheme together with companies Inacta AG and CV VC AG which themselves are based in Zug.

As the author Robert Collier famously said: “Playing safe is probably the most unsafe thing in the world. You cannot stand still. You must go forward”. With the development of Crypto Valley and its uses for Blockchain technology, Switzerland is definitely not standing still in terms of Blockchain development. But as Collier also said: “Supply always comes on the heels of demand” and Switzerland will continue to need skilled workers, sooner rather than later – especially regarding blockchain.

 Accurity GmbH has successfully delivered tailor-made employment services solutions for our clients for over 20 years. And as Switzerland’s most trusted payroll provider, we provide the best advice to all of our stakeholders to ensure they make the right decisions, no matter what industry sector or project role. We work with start-up businesses, corporate clients, recruitment agents, & contractors as well as international PEO’s. If you would like to speak with one of our team of experts, simply contact us now to see how we can make Switzerland easy for you!