Swiss politicians call for crypto ban

The illegal use of cryptocurrencies in Switzerland is increasingly becoming a problem, according to some political representatives. Among others, SP parliamentary group leader Roger Nordmann is therefore calling for a ban on "anonymous cryptocurrencies". His submitted motion on the topic is currently being discussed across party lines.

A few months ago, there was a data theft in the Rolle municipality. The responsible cybercriminals demanded a ransom in the form of cryptocurrencies and, in response to its failure, published the confidential data on the Internet. Similar incidents have been observed to increase in the past year, writes the Tagesanzeiger. Some Swiss politicians would like to put an end to this.

Ban on "anonymous cyber money" demanded

First and foremost, National Councillor and SP parliamentary group leader Roger Nordmann is speaking out. He is of the opinion that blackmailers and other cybercriminals have an easy time with cryptocurrencies. Blockchain transactions are often not attributable to a person, which makes it difficult for the authorities to prosecute. That is why the politician wants to ban the use of "anonymous cryptocurrencies" altogether. Nordmann pointed to the People's Republic of China's harsh measures banning any crypto services as an example.

"The use of cryptocurrencies in which the identification of the owner is not guaranteed must be banned." - Roger Nordmann, National Councillor and leader of the SP parliamentary group

This appears to be a cross-party concern. For example, SVP National Councilor and IT entrepreneur Franz Grüter joined National Councilor Nordmann's motion. He, too, is of the opinion that anonymous trading of cryptocurrencies must be stopped. Free-standing National Councilor Fréderic Borlotz went even further than Nordmann and Grüter. He even did not rule out a general ban on cryptocurrencies.

Editor's comment

Blockchain technology is new and is currently revolutionizing quite a few areas, including the transfer of value via the Internet. Thanks to blockchain technology, new worlds are opening up, many things are becoming simpler, more transparent and more efficient. This is referred to as the third revolution of the Internet (Web 3.0). However, new technologies and the associated opportunities also always require an adaptation of the legal framework. Switzerland is already very advanced in this regard with the DLT Act and, equally, standards are being defined at the international level on how to deal with the new blockchain technology and the cryptocurrencies based on it.
The regulatory approach of cryptocurrencies is shaping up globally and is in full swing. Western industrialized nations are adopting an approach that serves to prevent money laundering and seeks clear taxation of digital assets. Switzerland is already well advanced in these matters as well. Service providers from the area have to meet the same or tougher requirements than representatives from the traditional financial industry.
Cryptocurrencies are already legitimately used in everyday life and represent an essential part of the unstoppable digitalization. Studies estimate that the share of illicit crypto transactions in 2020 was around USD 10 billion, which is about 0.34% of the total value of all cryptocurrency transactions in the same year. Relative to the estimated 800 billion to 2 trillion of laundered funds of criminal origin, it is clear that the majority of illicit money laundering is still conducted through the traditional monetary system. The fines paid as a result of violations of applicable money laundering regulations and the recent Pandora Papers revelations speak a clear language in this regard.
Criminalizing this promising technology would therefore not be expedient and would be massively detrimental to Switzerland as a center of innovation. The fact that criminals also make use of new technologies is inevitable and part of history. However, there is a crucial difference between the regulation of a new innovation and a ban. Calls for bans along the lines of China should be critically questioned, at least in a direct democracy like Switzerland. Anyone who studies what is happening in the Middle Kingdom understands that the country prioritizes pursuing its interests, which sometimes rely heavily on the control of its own people. The recent introduction of its own digital currency (CBDC) is already well advanced, and a decentralized and censorship-resistant alternative in the form of Bitcoin is not expedient here from the government's perspective.
Bitcoin is not "anonymous cyber money." Transactions on the largest blockchain are publicly viewable and far easier to track than handing over cash. Moreover, in countries that lack a functioning financial infrastructure, or suffer from a severely depreciating currency, Bitcoin takes on a broader role than it does here at home. For the two billion people without bank access, Bitcoin can open a door to financial-economic integration. The digital cryptocurrency alternative is often the only chance for this segment of the population to participate in the economic system.
It is unlikely that cryptocurrencies are a causal problem for cybercrime. Rather, they are a side effect of the rapidly growing field of digitalization. Criminals would find ways to raise ransom even without blockchain technology. This is also the opinion of the Federal Department of Finance (FDF). According to FDF head of communications Peter Minder, one does not assume that there would be many fewer attacks without cryptocurrencies. A pragmatic approach to the matter is the best way forward before we start shouting for bans without a second thought.