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Earlier this month economics minister Johann Schneider-Ammann, made the case to journalists for Switzerland to become a major, “crypto-nation” as he arrived at a private crypto finance conference in the alpine resort of St Moritz. The nation is keen to be a part of the cryptocurrency action, and one area the Swiss are very keen to develop is that of initial coin offerings (ICOs). ICOs form the financing drive that allows cryptocurrency start-ups sell their tokens and raise funds to develop further. Early investors potentially win big if the solution grips the market. The FT reported last week as the ICO industry grows in Switzerland its business-friendly reputation has in the past been damaged by tax scandals. These scandals have cemented a bad reputation for Swiss banks and finance firms allowing wealthy clients to evade tax.

GETTY Bitcoin and Switzerland are, at least on face-value, a marriage made in heaven

GETTY Bitcoin and Switzerland a marriage made in heaven, but for all the wrong reasons?

Roman Bruskov, DeHedge Editor-In-Chief told Express.co.uk, the Swiss government is placing a very risky stake on cryptocurrencies by making such bold announcements about ICOs. He said: “The established history of the Swiss nation as a haven for finance, its constant neutrality in world affairs and its adherence to banking secrecy is making it an ideal refuge for crypto investors and a playground for the germination and development of some very dangerous precedents that could leak into the outside world eventually. “The mere fact that the Swiss government is making such statements puts it, and its considerable weighing in financial affairs, in stark contrast with mainstream global movements aimed at stemming the volatility and rampant spread of cryptocurrencies as a destabilising force for many economies.” Sounding a cautionary note, Mr Bruskov added: “It will not be long before we witness the first scandal involving the words ‘Swiss’ and ‘crypto’ in the same headline if such hazardous foreplay with the phenomenon is allowed to develop further.” So is bitcoin and Switzerland a marriage made in heaven, but for all the wrong reasons?

It will not be long before we witness the first scandal involving the words ‘Swiss’ and ‘crypto’ in the same headline if such hazardous foreplay with the phenomenon is allowed to develop further Roman Bruskov, DeHedge Editor-In-Chief

Olga Feldmeier, CEO of blockchain startup SMART VALOR argues that there are a number of factors pulling them closer. Mr Feldmeier says that Switzerland is one of the most decentralised and democratic societies in the world. He told Express.co.uk: “If you would put ‘decentralisation’ of power on a line from 1 to 10, Bitcoin is at 10 and Switzerland is at 9. “Switzerland’s direct democracy is unique example of how decentralisation works in practice. It is actually equivalent to what Bitcoin is in terms of technology.” Switzerland’s reputation for secrecy extends past “Swiss bank accounts” being the fictional end destination for the spoils of every villainous plot in the movies. Analysts argue that for over 200 years Swiss finance has exploited bank secrecy for commercial gain. Mr Feldmeier said: “Switzerland used to be safe-haven for rich and powerful around the world to protect their wealth during wars and instabilities. As this concept disappears the question of the redefinition of key competitive advantage emerges.”

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Although Switzerland still dominates banking for the world’s richest, its market share in “secret” banking is beginning to slide. Switzerland can still boast $6.8tn in assets under management but this is well below its 2007 peak when, according to a report from the Swiss Banking group, 9.1 percent of global assets under management arrived in Switzerland at a massive total of over $10tn - a number made all the more amazing considering that its gross domestic product was just $477 billion in the same year. Swiss banks UBS and Credit Suisse are global finance giants but the entire industry is in retreat after the US launched an investigation in 2008 into how Swiss banks helped its clients to evade the US taxman. A senior private banking executive at a non Swiss firm told the FT in December that after the US clampdown on tax evasion, “the unique selling point of Switzerland is being eroded. Clients are just as happy in the UK, or the Netherlands”. Mr Feldmeier says that cryptocurrencies allow “Switzerland to build a competitive edge”. However, most importantly, an appropriate regulatory environment is needed to support these new businesses.

GETTY Switzerland is seen as a natural home for bitcoin