The fact that blockchain‐​based projects were able to gain a foothold in Switzerland also has to do with its national history and thus the cultural DNA of its people. In Switzerland, more than in other countries around the world, there is a cultural affinity for decentralized solutions. A unique set of spontaneous processes created Switzerland which may not be readily replicable in other countries with more centralized governments. In general terms, the nature of Switzerland and that of its citizens is based on two topoi: The refusal to be ruled, because being ruled always means losing a certain degree of self‐​sovereignty. That skepticism towards centralized power is combined with the insight that there are common problems that should be solved together, as flexibly as possible, done cooperatively and without outside interference.

This is the inheritance that still seems to be more firmly anchored in the Swiss consciousness than it is elsewhere. Switzerland is therefore considered one of the most decentralized countries in the world. The crucial question is: What has been its recipe for success?

The secret of the Swiss federal state’s success was that it started as a minimal state. In the early days of the modern Swiss state in the 19th century, there were really only a dozen professional civil servants. They did not have the ability to levy any direct federal taxes, which meant that the federal state only had a minimal budget based on customs duties alone. A high degree of cantonal and local autonomy with functioning political microstructures was thus maintained. These structures did not spring from the common will to have a “lean government” but from the fact that there was simply no money in the public purse and thus few civil servants and little central bureaucracy. The right things were done because the financial and human resources were not available to do the wrong things.

This is also why Switzerland remains so decentralized compared to other countries today; while the Swiss central government continues to grow, its rate of growth is slower than anywhere else in the world.

However, even in Switzerland the tradition of skepticism about centralization is on the retreat. Not least because of pressure from abroad, the federal state is being strengthened at the expense of its decentralized structure. The reduction of political decentralization has been accompanied by attempts to harmonize Switzerland’s financial sector with the international financial system. In the wake of the 2008 financial crisis, the International Financial Stability Board was established by the G20. Its task was to make the global financial system more centralized and thus — in the eyes of these functionaries at least — more secure by means of uniform regulation. Of course, centralizing financial activities does not necessarily make them more secure at a fundamental level; rather, it centralizes risks in a single location, which ultimately creates a “single point of failure” and leads to systemic uncertainty.

In the case of crypto, one new piece of legislation has been particularly severe. In 2016, the Financial Market Infrastructure Act was passed in Switzerland. From the point of view of many crypto advocates, this new act brought about a significant deterioration by bringing the Swiss legal situation into line with that of the European Union and thus making legal interpretation more laborious and diffuse. With the passage of this act, Switzerland gave up a much of the aforementioned flexibility in matters of financial market law. Because of this EU‐​compatible law, Switzerland has to devise a new and flexible authorization category for blockchain‐​based financial market infrastructures. Under the old legislation before 2016, the Swiss regulator could have permitted things like blockchain‐​based exchanges at its own discretion. The Financial Market Infrastructure Act has taken away this discretionary leeway.

The Swiss financial sector has been adversely affected by this development. The value of the Swiss financial industry as a percentage of GDP fell from 8.2 percent in 2007 to 4.6 percent in 2017. Some crypto‐​enthusiasts are therefore convinced that blockchain technology is a way to breathe new life into the dying Swiss financial sector and a way to make Switzerland a leading player in the financial system of the future once more.

Prominent bankers are therefore increasingly turning their back on the traditional financial world in order to work for a blockchain start‐​up or to set up one themselves. Arthur Vayloyan, former banker at Credit Suisse and most recently at Falcon Private Bank, joined Bitcoin Suisse AG in November 2017 as their new CEO. With the exit of Andreas Amschwand, the Julius Baer Group lost a long‐​standing board member to the newly founded crypto bank Seba. And the former head of the Swiss Stock Exchange, Christian Katz, also flirts with the crypto world as the Chairman of the Board of Directors of the new Swiss Crypto Exchange (SCX).