Crypto Valley (Zug): the crypto hotspot in Switzerland

The region around the Swiss city of Zug has grown in recent years into the premier crypto hotspot.

The region around the Swiss city of Zug has in recent years grown into the crypto hotspot par excellence.

Everyone's talking about it - Crypto Valley. It traces back to the canton of Zug. A small canton known for both tradition and innovation. A strong financial hub that lures with its scenery and views of the Swiss mountains. And exactly? Passersby who are stopped at Zug station by chance feel a bit embarrassed because they themselves have never been to Crypto Valley. Are you sure?

No signpost helps in the search; all you can find is the option to buy Bitcoin at the SBB ticket machine (Swiss Federal Railways). If this isn’t a place, what is it? And what does that mean for players? The answers are obvious, or better: found in a good cup of coffee. Several interviewees from administration, education, and the management of legal services discuss their definition of Crypto Valley, its emergence, and its significance.

"A focused ecosystem"

For Alberto Diaz (Deputy Head of the Economic Contact Point of the canton of Zug and head of the Blockchain Cluster), Crypto Valley is a "focused ecosystem that concentrates on blockchain technologies." Once a pioneer, Diaz now sees Crypto Valley as "one of the world's leading, closest clusters of blockchain and crypto companies." It all started in 2014/15 when a delegation of about 20 notable figures, including representatives from the Ethereum Foundation, visited Zug. After careful evaluation, the foundation set up in Zug. The Ethereum protocol was written here. With the foundation came an initially small community, but the location had already drawn attention.

In this fast-growing ecosystem, even more use cases, layers, and protocols emerged. Key success factors for the settlement were proximity and openness of municipal and cantonal authorities, legal certainty, a democratic form of government, and a generally business-friendly climate. Authorities worked together and saw themselves as enablers. Trade registry, tax office, the city administration—all pulled together. Yet it’s not just thanks to the city or the canton of Zug; distances are short and, according to Alberto Diaz, the "smallness" makes it easy to collaborate and approach one another.

Crypto Valley is a community

Diego Benz (Partner, Attorney and Notary at Kaiser Odermatt & Partner AG) shares this view as well. Without the openness of the entire government and its agencies, such as FINMA (Swiss Financial Market Supervisory Authority), this "success story," as Prof. Dr. Tim Weingärtner (Lucerne University of Applied Sciences and Arts, HSLU) calls it, could not have been written. Diego Benz adds that it’s the on-eye-to-eye exchange that enables business activity to unfold. That’s also evident from the Dragon Mountain project, which he fondly recalls.

Prof. Dr. Tim Weingärtner emphasizes the importance of this exchange while also creating a platform that promotes and challenges it. According to Weingärtner, the highly interdisciplinary sector benefits greatly from having everything it needs: lawyers, business developers, and IT specialists. An ecosystem formed this way grows through trust built on ethical behavior. Crypto Valley is also a strong brand that all participants should be aware of. The role of HSLU lies in education and training with offerings tailored to industry needs. In a nutshell: for Prof. Dr. Tim Weingärtner, Crypto Valley means "community." As for the aforementioned "brand," care has already been taken in its creation.

Zug as the crypto hub's center

Back to the city of Zug. Genuine interest is often hard to discern. Not in Zug. From the very start, it’s been innovative and home to groundbreaking projects. For example, since 01.07.2016, residents can pay municipal fees up to 200 CHF at the counter of the residents’ registration office using Bitcoins. A little over a year later, on November 15, 2017, the digital identity, based on an app and operating via the Ethereum blockchain, became available to residents of the city of Zug.