Switzerland has positioned itself as a leading digital innovation hub, thanks to its progressive regulations and welcoming environment for crypto enterprises. At the heart of this innovation is Zug, known as the Crypto Valley, which is home to hundreds of firms driving fintech and blockchain development. The country’s robust regulatory framework ensures the security and privacy of all stakeholders, earning it a prominent position in the crypto innovation landscape.
According to the Henley & Partners Crypto Adoption Index report 2023, Switzerland ranks second with an impressive score of 46.9%. The country excels in innovation and technology, regulatory environment, and economic factors.
This article explores the process of buying Bitcoin in Switzerland and addresses questions about its legality, Swiss banks’ attitudes towards cryptocurrencies, and various methods of purchasing Bitcoin, such as crypto exchanges, Bitcoin ATMs, P2P platforms, and Swiss Federal Railways (SBB) machines.
Is Bitcoin legal in Switzerland?
Switzerland takes a forward-thinking approach to cryptocurrencies like Bitcoin. Swiss regulators recognize Bitcoin as a legal asset or property, allowing exchanges and digital currency platforms to operate within the country once they obtain the necessary permissions.
Profits made through Bitcoin are subject to income tax for corporations and professional traders, or wealth tax for individuals. Switzerland has fostered a robust blockchain ecosystem through its crypto-friendly regulations, particularly in the canton of Zug, also known as Crypto Valley due to its concentration of cryptocurrency and blockchain-related enterprises.
To ensure security and transparency in the crypto industry, Switzerland has implemented laws governing virtual asset service providers (VASPs). These providers must comply with the Financial Services Act (FinSA) and the Anti-Money Laundering (AML) Act, conduct thorough customer due diligence, implement Know Your Customer (KYC) processes, register with the Financial Market Supervisory Authority (FINMA), and adhere to strict reporting guidelines.
Under Swiss regulations, a VASP is considered to operate professionally if it meets the following criteria:
1. Generates a gross revenue exceeding 50,000 Swiss francs per calendar year.
2. Establishes business relationships with more than 20 contractual parties within a calendar year.
3. Exercises unrestricted control over third-party funds totaling more than 5 million francs.
4. Executes transactions with a total volume surpassing 2 million francs annually.
How Switzerland’s banking sector embraces cryptocurrencies and blockchain
Swiss banks have introduced various cryptocurrency products and services, including trading and brokerage partnerships with specialized platforms, integration of cryptocurrency in wealth management portfolios, custodial services for institutional investors, and the development of investment funds or structured products based on cryptocurrency performance.
Many Swiss banks are also embracing blockchain technology to enhance their operations. For example, Cantonal Bank uses blockchain to diversify revenue streams and attract tech-savvy customers. Falcon Private Bank, Julius Bär, and Vontobel banks collaborate with cryptocurrency experts to offer trading and asset storage services.
Maerki Baumann Bank provides corporate banking accounts for companies involved in security token offerings (STOs), while Santander Private Banking International plans to offer cryptocurrency trading and custody services to its high-net-worth clients in Switzerland. All these services comply with Switzerland’s advanced crypto legislation.
How to buy Bitcoin in Switzerland
Swiss users have several options for purchasing Bitcoin:
1. Cryptocurrency exchanges: Switzerland hosts both global and local crypto exchanges, such as Binance, Crypto.com, Kraken, and Bitcoin Suisse, catering to institutional investors and individual traders. Users should choose a secure exchange, complete the necessary identity verification processes, fund their account with Swiss francs or other recognized fiat currencies, place an order, verify the details, and store the purchased Bitcoin on the exchange or in a private cryptocurrency wallet.
2. Bitcoin ATMs: Over 130 Bitcoin ATMs are available across Switzerland, allowing customers to buy Bitcoin and other cryptocurrencies using cash. Users can deposit cash, choose their preferred cryptocurrency, and receive coins of equivalent value in their chosen wallet. They can also deposit cryptocurrencies and withdraw cash after completing verification.
3. Peer-to-peer platforms: P2P exchanges enable users to buy or sell Bitcoin directly with other individuals on a platform like Paxful or Remitano. Users must register, complete any required identity verification processes, browse through the list of sellers, open a trade, discuss terms, and finalize the transaction by paying the seller via bank transfer or debit/credit card.
4. Swiss Federal Railways machines: The SBB introduced a program in 2016 that allows users to buy Bitcoin from ticket vending machines. Users need a Bitcoin wallet and a Swiss mobile phone number to access these machines, which are spread across over 700 rail stations. However, SBB’s Bitcoin service charges high fees, ranging from 6% to 14%, making Bitcoin purchases expensive.
How and where to spend Bitcoin in Switzerland
Switzerland is witnessing an increasing adoption of cryptocurrency, making it more feasible to spend Bitcoin. Restaurants, shops, luxury boutiques, and well-known brands like McDonald’s, Rolex, and Lamborghini in Zurich, Geneva, and Lugano accept Bitcoin as payment. Additionally, a large number of online merchants and service providers offer BTC and other crypto payment options, with various services facilitating the conversion between fiat and crypto.
Bitcoin ATMs across the country simplify the process of exchanging Bitcoin for Swiss francs. Many cities, including Basel, Bern, Genève, Ipsach, Lausanne, Biel/Bienne, Chur, and Lugano, have Bitcoin ATMs, with Zurich hosting almost 40 of them.
How to store Bitcoin in Switzerland
Storing cryptocurrency securely is crucial to mitigate risks such as theft, hacking, scams, and cyberattacks. Leaving assets on exchanges exposes them to hacking risks, so it’s advisable to store crypto offline in cold wallets. Cold wallets, such as USB drives or paper wallets, are not connected to the internet, making them less vulnerable to online threats. This method is preferred for long-term storage of cryptocurrency assets.