Switzerland, the land of traditional and extremely safe banking institutions, heralded by high net worth investors worldwide as a safe haven for untold wealth, has taken a somewhat unorthodox step toward the acceptance of virtual currencies as a means of payment.
SBEX, an acronym for Swiss Bitcoin Exchange, has been authorized by national regulatory authority FINMA.
Alexis Roussel, founder and CEO of SBEX stated last week that the approval of SBEX by Switzerland’s financial regulator “opens up fantastic opportunities for crypto-currencies in Switzerland, creating a clearly regulated environment in this area.”
Mr. Roussel is also vice-president of the Swiss Association of Bitcoin.
The regulation of a Bitcoin exchange by FINMA marks a milestone in the long road to legitimization that virtual currency has traveled, as well as making a giant step toward easing the consumer protection related fears which continue to plague the minds of many since the demise of MtGox earlier this year, a situation in which the vast majority of investors were unable to seek recourse over their lost Bitcoins.
Additionally, with Switzerland’s gilt-edged reputation for ensuring that only the most reputable firms operate within its borders, the arrival of SBEX could serve to remove negative connotations previously associated with Bitcoin as a result of illicit trading conducted via annonymous market places such as Silk Road, itself having been the subject of seizure by the United States government last year.
In the period preceding the approval by FINMA, Switzerland’s authorities had become concerned with the 13 million units of crypto currency in circulation that were not subject to regulation. On this basis, the regulatory approval has been a welcome development.
At the end of last year, incumbent National Council for the Swiss Socialist Party, Jean Christophe Schwaab, demanded a postulate in the Federal Council to assess the risks to the economy of this new monetary unit. The Federal Council is preparing a report on Bitcoin which will be released at the end of this year.
One of the most advantageous and potentially market-changing factors relating to FINRA’s ruling is that Bitcoin has now become recognized as a means of payment in Switzerland.
“The two key points in this authorization from FINMA are that bitcoin is now treated as a payment in Switzerland, and a deposit bitcoins is considered a bank deposit, “said Alexis Roussel.
Currently, the SBEX platform does not facilitate the direct sale and purchase of Bitcoin, as offered by FX trading platforms. “We are finalizing the development of services to place orders to buy and sell online, says the CEO. It is already possible to contact SBEX to place orders by phone with our operators, who are responsible for providing market liquidity through their international suppliers” stated Alexis Roussel.
A point of interest is that it is now very much a possibility to go to a Swiss operator to buy Bitcoins. In the near future, SBEX will be come a sophisticated trading platform for Bitcoin, in which the virtual currency will be able to be traded online as per standard FX trading platforms. The current SBEX is set to launch a quick fix under the url www.fastcoin.ch, which will be operational within the next few days, on which individuals can buy Bitcoins online.
As for Bitcoin deposits from banks in Switzerland, FINMA has put into place a legal framework. However, “from a technical point of view, says Alexis Roussel, “existing banks are not yet equipped to host such deposits.”
If a new institution that specializes in Bitcoin would be brought into existence, it could apply for a banking license to accept deposits in Bitcoin, in exactly the same way as traditional banks accept fiat money. “This is a great step forward,” said Alexis Roussel.
The organization is now affiliated with the Association Romande des Intermediaries Financiers (ARIF), which makes it subject to the Swiss Money Laundering Act (AMLA). SBEX is part of DigiCapital Holding, based in Neuchâtel, a holding company that relies on private funding.
In addition to the web platform, it will be possible to exchange Bitcoin currency everywhere in Switzerland via ATM terminals. In order to facilitate this, SBEX has partnered with Canadian firm BitAccess, a prominent Bitcoin ATM provider to deploy an extensive ATM network throughout Switzerland. Its machines are used to exchange instant cash against an electronic wallet containing the equivalent in Bitcoins, or perform the reverse operation to convert bitcoins into local tender. The first ten ATMs have been sent from Canada to the United States. The first Bitcoin ATM was installed in Geneva earlier this year in a restaurant, attracting a lot of attention on the part of individuals and also the financial sector.
For BitAccess, “This partnership is a key step, because we wanted to build a presence in the heart of Europe, Switzerland is essential to its proximity to major financial institutions” says Moe Adham, co-founder of BitAccess.
Alexis Roussel claims that law students learn to encode electronic contracts, which therefore demonstrates that Bitcoin coding could become a mainstream activity in the future. According to him, it is not in the interest of banks or government departments to attempt to combat the popularization of Bitcoin, but instead better to take the approach adopted by Switzerland in setting out a regulatory framework. “History shows that once the mass adoption takes hold, it is hard to stop the machine” he concluded.