27 May 2020 Josphat Kariuki
Crypto Valley Projects Rejected For COVID-19 Relief Packages In Switzerland
As the world slowly recovers from the COVID-19 economy crash, Switzerland’s blockchain startups applied for a $103 million relief package for the uprising industry. Heinz Tannler, which is the finance director of the Canton of Zug, made the proposition in April, stating that blockchain startups also suffered from the catastrophic economic scale of the coronavirus outbreak. Tannler noted that blockchain startups also deserve financial stimulus, much like fintech startups.
However, Tanner’s proposal was denied by the local government. A report by German-language news outlet Tages-Anzeiger clarified that the blockchain industry was the only one that got the denial, among more than ten sectors.
The rejection means the crypto industry would suffer from a massive hit. Despite being commonly referred to as a financial safe haven, Switzerland hasn’t been spared from the economic standstill. Another report states that in the next six months, over 80% of the blockchain startups would file for bankruptcy. Furthermore, a document from the Swiss Blockchain Federation states that from all of the crypto startups in the Canton of Zug, 60 percent had to lay off some or all of their staff.
In the meantime, the fintech sector received as much as $159 million from the Swiss federal government, which leaves the blockchain startup industry to apply for a commercial bank loan. The plan is the Swiss government would cover 65% of the total amount, while the Canton of Zug would cater to the rest of the funds. The task of blockchain startup eligibility would be in the hands of the Canton of Zug.
However, the loan is not a firm solution for blockchain startups, as the startups would be in a similar position once commercial banks start to collect the loaned amounts. Globally, the trend shows 74 percent of the startups had to lay off some of their staff. A mere 40 percent of the startups have no more than three months of funds.Blockchain Blockchain Development Blockchain Application business fintech news fintech switzerland Blockchain News Blockchain technology Coronavirus