As blockchain has now become a buzzword, Switzerland is gearing up to tap into what could well be one of the most disruptive technologies since the Internet was introduced 20 years ago.
“Blockchain is, without question, the most significant advancement in enterprise IT in a decade, on a par with big data and machine learning,” said Jeremy Millar, partner at Magister Advisors and research lead.
“What Java is to the Internet, blockchain is to financial services,” he said.
More specifically, blockchain technology can process trades, bonds and others in record time, a potential that UBS is intensively exploring with innovation labs. Led by Oliver Bussmann, these innovation labs are places where UBS engineers work with startups to pinpoint viable mainstream blockchain solution for future use.
One of the latest blockchain initiatives that have emerged in recent months in Switzerland is Nexussquared.
Zurich-based Nexussquared fully launched in January this year and is currently building a blockchain business platform dedicated to the Swiss market, which is expected to be ready by the end of Q1 2016.
Nexussquared’s mission, it says, is to be a catalyst for the comprehensive development of the Swiss blockchain ecosystem.
Essentially, Nexussquared assists new ventures and established players with integrating blockchain technology into their business models.
Co-founders Daniel Gasteiger, a former veteran UBS banker, and Daniel Grassinger, a real estate expert, are looking to turn Switzerland into a major hub for blockchain initiatives.
Blockchain technology is still in its infancy and it is difficult to predict how the technology will evolve, and yet, both founders firmly believe that its disruptive potential could be huge. “The opportunities are tremendous” and go well beyond the financial services industry, Nexussquared founders told Fintechnews in an email communication.
All in all, “it is an efficiency and transparency game,” Daniel said.
Daniel Gasteiger explained:
“Once fully developed, blockchain technology and smart contracts will affect any business that is built on trust by allowing to remove traditional middle men functions like lawyers, notaries etc.
“Having a look at the applications we receive for our nexuslab startup programme, it’s exciting to see the use cases currently being designed and developed out there in the startup world. Being able to guarantee the provenance of a good is in itself a huge business proposition and a lot of startups are looking to use blockchain technology to develop solutions in that space.”
Nexuslab is a virtual blockchain startup acceleration program that the company introduced in December last year designed to reflect “the decentralized setup of many of today’s fintech ventures” and allow them to “source talent based on skills rather than location.”
The program, established in partnership with Startupbootcamp Fintech London, will wrapped up its application phase on March 31st, 2016 and kick off the inaugural class in April. It starts April 24th with a 3 day offline weekend hang-out.
So far “32 promising startups have already registered,” Grassinger tolder Fintechnews. These startups are tackling various areas including customer incentivation through loyalty programs, IP management for photography and event/ticket management. In total they have identified and contacted around 250 blockchain startups in Europe.
Fintechnews had the opportunity to catch up with Daniel Grassinger and Daniel to learn more about the story behind Nexussquared, how blockchain technology could impact existing business models and why he believes that Switzerland is well suited to become a hotbed for blockchain innovation.
Fintechnews: How did you learn about in blockchain technology?
Daniel Gasteiger/ Daniel Grassinger: In February 2015, we visited the Launch Festival in San Francisco as part of a three week study trip to Silicon Valley. We were both looking for inspiration on our next career step, which we knew would take us outside of the corporate world.
At the festival, it was somewhat of an open secret that blockchain was the next big thing to come. We met a few people involved with the technology and got hooked after reading ‘The Age of Cryptocurrency’ by Paul Vigna and Michael J. Casey, a book that can already be considered a classic.
Funnily enough, the defining moment probably was when we met with Ursula and Gregory from the Swisscom Outpost in Palo Alto. They explained to us how the blockchain core paradigms of trust, decentralization and empowerment of individuals matched Switzerland’s core values perfectly and strongly encouraged us to build a business proposal bringing together the strengths of blockchain and Switzerland.
Fintechnews: How do you see blockchain technology evolve in the future?
Daniel Gasteiger/Daniel Grassinger: Blockchain technology is still in its infancy. It started with the Bitcoin blockchain seven years ago and Bitcoin had obviously anything but a quiet ride since its inception. There are still many questions that need to be addressed from a technological, scientific, and regulatory perspective when it comes to virtual currencies like Bitcoin and blockchain as the underlying technology. The situation is not unlike what we had in the mid 90s when the internet started to develop.
To project the future of blockchain is difficult. It’s hard to envision the impact of this technology, just as it was hard to predict how the internet is going to affect different areas of our lives back when the technology was still in its infancy. From what we’ve learnt so far, we believe that the opportunities are tremendous. That’s why we founded nexussquared.
Fintechnews: How are regulators responding to blockchain technology?
Gasteiger/Grassinger: There’s been increasing interest in the technology over the last few months. We can read almost daily about governments announcing their interest in looking into blockchain to better understand it.
Just this January, the UK Government released a very interesting report on how blockchain technology could be leveraged in government settings in the future.
Japan, Russia, Ukraine, Germany and also Switzerland are investigating into Bitcoin and blockchain in order to develop meaningful regulations.
But the most advanced country in the world, from our perspective, is Estonia with their e-residency programme that already leverages blockchain in parts. We are monitoring these developments closely. But as with the technology itself, regulation in this field is still in its infancy.
Switzerland has the chance to take a leading role and make blockchain a core strategic advantage for its financial centre and beyond by proactively embracing the opportunities the technology offers through liberal regulations.
This, in turn, would attract blockchain startups to set up shop here. We already have a great foundation for such a hub with the Cryptovalley Zug but are quickly falling behind countries like Singapore and the UK that officially embrace the opportunities blockchain brings and offer regulatory support for startups.
Fintechnews: What is it that makes Switzerland an attractive place to set a blockchain venture?
Gasteiger/Grassinger: Switzerland’s core values, our stability, both economically and politically, our strong privacy laws, the trust in our political system that is underpinned by our direct democracy are major factors. All of this paired with our financial centre expertise makes Switzerland the perfect home for startups in the blockchain space. Year after year, rankings show Switzerland as the most innovative country in the world and we are home to some of the leading universities.
But there are also areas that bring us disadvantage: The high cost of living in Switzerland makes it difficult for startups to set up shop here. It’s an issue we actively address with our virtual startup programme nexuslab. The programme also seeks to overcome visa restrictions, which can constitute another hurdle. Our virtual approach will help attract startups to Switzerland, even if only in a virtual manner at first. The most promising ventures will then hopefully acquire funding that allows them to incorporate here.
Gasteiger concluded: “Every CEO must understand the blockchain impact for his business” and Switzerland has to wake up!
Nexussquared is currently in talks with three new and “very interesting blockchain companies” it hopes to partner with to bring their expertise to the Swiss market and into Nexussquared’s overarching blockchain platform offering.
Nexuslab is also seeking business mentors from Switzerland and abroad who would be interested in helping these young and promising European blockchain startups bring their ideas to life.
Nexussquared also organizes networking events (so-called Nexusconnect) in Zurich and sponsors blockchain events in other parts of Europe, among which Romania, Poland and Czech Republic. The company intends to organize the first annual Global Blockchain Summit taking place in Zurich.
The next nexussquared drink-up will be on March 22th.
Featured image: Switzerland, via Pexels.
