Appetite for blockchain technology is growing worldwide as venture capital investment in Bitcoin and blockchain startups exceeds US$1.1 billion and major financial institutions begin trialing the technology for varied applications.

Perceived as the trigger to “a profound technological shift” by authors Don and Alex Tapscott, blockchain technology not only promises to help banks save up to US$20 billion in infrastructure costs but could also disrupt other industries as well including insurance, healthcare, education and governance.

While Silicon Valley reminds a hotspot for blockchain development, hosting 30% of the world’s bitcoin and blockchain startups and attracting 51% of the total venture capital investment globally, according to CoinDesk‘s Q1 2016 State of Blockchain report, other locations around the world are working towards building a strong domestic ecosystem.

In June, 24 members of the Swiss Parliament proposed a motion to reduce the regulatory burdens of blockchain startups. The motion, aimed at defining the term ‘client deposit’ from banking bills, was rejected earlier this month, implying that FINMA, Switzerland’s financial watchdog, would consider blockchain and bitcoin startups as being qualify as banking businesses, according to a report by Startupticker.ch.

Switzerland is exploring other options including creating an entirely new license category for financial innovators carrying out some banking activities but with limited acceptance of client assets and no lending activity, as well as a license-exempt area, also referred to as a ‘regulatory sandbox.’

On January 01, 2016, FINMA revised its Anti-money Ordinance for businesses dealing with new payment methods and virtual currencies. Regarding virtual currencies, the authority equated them with money-transmitting services.

Switzerland’s Bitcoin and blockchain ecosystem

In recent years, the Swiss canton of Zug has welcomed a growing number of Bitcoin and blockchain startups settling and opening offices in the location. This has led to the emergence of the “Crypto Valley” nickname which today hosts the likes of Monetas, Shapeshift, Xapo and Blockchain Source.

Monetas is a software company focused on next-generation financial services, providing banks and firms with a platform that allows for safe, fast, and very low cost transfers of any asset. In October last year, the company announced a pilot for a nationwide transaction platform for Tunisia’s postal services.

Shapeshift is a cryptocurrency exchange platform that allows for instant trade.

Blockchain Source is a consulting firm specializing in blockchain tech for the financial services industry.

Xapo provides users with a bitcoin wallet as well as a “deep cold storage wallet.” The company has raised US$40 million in funding so far. The company, initially based in Palo Alto, relocated its corporate headquarters to Switzerland in May 2015, citing the country’s long history of neutrality and stability.

Alongside its vibrant startup community, Switzerland is also home to Nexussquared, a blockchain-focused incubator founded by former senior UBS banker Daniel Gasteiger and property specialist Daniel Grassinger that aims at “establishing Switzerland as a nexus for blockchain technology.”

In July, Nexussquared wrapped up the first edition of nexuslab, a virtual blockchain startup program co-organized with Startupbootcamp Fintech.

Eight startups presented during the nexuslab Festival finale in Zurich on July 07. These ventures included Agrello, an Ethereum-based platform for managing contracts and legal documents; Doqum.io, a peer-to-peer community system for digital documents; First Wallet, a payment system for content providers; and Taqanu Bank, a neo-bank that leverages blockchain technology to provide banking services to people who don’t have a fixed address; among others.

The event gathered nearly 170 investors, industry experts and journalists. The presentations by the eight startups “pointed to Switzerland’s strong position as a blockchain hub,” Nexussquared said in a media release.

“From trading ownership in music as a form of alternative investment to a banking solution for refugees and creating and signing electronic contracts, festival attendees got a taste of how blockchain technology can be applied to develop tangible business models.”

On September 13, the Finance 2.0 Crypto ’16 conference in Kunsthaus Zurich will welcome industry experts to discuss “how cryptofinance will change the world.”

Topics will include the use of blockchain technology in art and music, decentralized autonomous organizations, smart contracts, business applications for private and open chains, as well as international settlements using cryptocurrencies. Get an exclusive 25% Discount with Code “FinTech” .

Featured image: Chain and padlock by ifong, via Shutterstock.