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LONDON (InsideBitcoins) — Europe continues to be divided on the issue of what, if any regulation should be levelled at Bitcoin and other cryptocurrencies. As Inside Bitcoins has already reported, Russia, the EU and the U.K. have all adopted widely diverging stances on the future of the currency. And not content to sit on the sidelines, non EU member state Switzerland has waded into the debate with a stance of its very own.
Finma, the Swiss Financial Market Supervising Authority, having previously stated that Bitcoin contributions were “too insignificant to be worthy of legislation,” has sparked a debate as to whether or not the small country — like the U.K. — should become a Mecca for virtual currency trading.
“Switzerland is fundamentally decentralized and democratic.” Luzius Messier told Inside Bitcoins. Messier, the president of the Swiss Bitcoin association has been following developments closely.
“In Switzerland, decisions are taken bottom-up instead of top-down. Our politicians are used to dealing with decentralized systems and thus are probably less afraid of Bitcoin than for example the French, who are used to having everything centralized in Paris,” Messier said.
“The qualification of “insignificant,” he added, “refers to the present state, and not the future potential. In comparison to multi-billion franc industries such as banking, pharmaceuticals and watches, the council’s qualification is understandable. Much more important is its consequence, namely that no new laws are needed, which is in line with my view.”
Which is not to say that Messier thinks that Bitcoin should be free from any kind of regulation; today’s ‘insignificant’ is tomorrow’s next big thing and EU and Russian fears of the currency being used illicitly are, he thinks, all too real if not as yet, imminent.
“The fear is legitimate – any powerful technology can be abused. However, it is also too early to take action. Switzerland has one of the oldest and strictest anti-money laundering laws in the world. For example, the know-your-customer rule was invented by the Swiss in the early ‘90s, long before others started to address this issue. For now, there is no need for additional regulation in Switzerland. The existing laws cover the relevant questions.”
All of which is in stark contrast to the EU’s push for urgent legislation, which in European Parliament terms is proceeding at a rapid pace — too rapid for Messier who sees them as having missed an opportunity with existing anti-money laundering legislation.
“It specifically took ‘e-money’ into account, but defines it in such a stupid way that it does not apply to Bitcoins. Thus, Bitcoin is not covered by the EU’s AML directive. Swiss law is much shorter and more general and of course it applies to Bitcoin. This is one of my favourite examples of how European law-makers often shoot themselves into the foot by being overly specific and detailed.”
For the time being then, Bitcoin is safe in Switzerland. And just as the U.K. tries to position itself as a centre of Bitcoin activity, Messier sees great things in its future relationship with Switzerland.
“Thanks to the vast existing financial know-how in Switzerland, there is big potential for cross-pollination between traditional finance and crypto-finance, leading to fruitful innovation. Switzerland’s watch industry was once under pressure by Japanese competition, before it got revolutionized by visionary Nicolas Hayek, the founder of Swatch, marking a turning point and revitalizing the whole industry again. There is the potential for something similar to happen in banking thanks to Bitcoin.”
Ian Jackson is an Inside Bitcoins correspondent based in the U.K.