Glossary

Crypto Valley in Zug, Switzerland

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Glossary Crypto Heroes Crypto Valley Lesson

Zug is a tiny and charming city located only a 20-minute train ride and one hour drive from Zurich. The city has become famous in the crypto sphere for becoming the hottest destination in the world for blockchain businesses.

The city is commonly associated with the term Crypto Valley which has gained prominence in recent years to describe the region in Switzerland that attracts international cryptocurrency and blockchain companies.

Zug, both a city and a canton (an administrative unit), is home to over 600 blockchain companies.

What makes Zug attractive to Blockchain-based startups?

To start with, Switzerland is a leading financial hub that is located at the heart of Europe that has excellent domestic and global business networks, efficient bureaucracy, and low corruption.

Zug’s favorable tax structure, its legal stability, its openness to experiment, and its growing network of financial and legal service providers proved a perfect match for the emerging crypto and blockchain movement. When Bitcoin started the cryptocurrency movement in 2009, global blockchain entrepreneurs identified Switzerland, and within Switzerland, Zug, as the ideal base for operations.

In July 2016, the city of Zug set another record by becoming the first municipality in the world to start accepting Bitcoin as payment for local taxes. Although actual Bitcoin transactions have been low the gesture was welcome news to crypto enthusiasts and worshippers. It was a sign that Zug was open for crypto business. This attracted numerous blockchain and crypto entrepreneurs to the city.

Furthermore, Zug is the home of the Crypto Valley Association (CVA) which is a government-backed nonprofit that aims to build the world’s leading ecosystem for blockchain and cryptographic technologies. The CVA is possibly the main reason why many of the biggest crypto projects (including the Ethereum Foundation) chose to incorporate in Zug.

The Crypto Valley Association is supporting startups and established businesses, hosting various industry events, creating industry standards and best practices, making policy recommendations, connecting the Crypto Valley with other international centers of blockchain innovation.

Ethereum-based IDs and system

In 2017 the Crypto Valley announced that it was launching a blockchain-based voting system that used its digital ID (eID) in November and in 2018 it successfully completed its first test of a local blockchain-based voting system.

Today, a majority of local government services are offered using different blockchain-based applications which makes it easy and fast for residents to acquire government services.

Incorporation of blockchain in service delivery by Zug officials has received lots of praise around the world and many government officials are frequenting the city for benchmarking.

Fastest-growing tech hub in Europe

On December 6, 2018, Zug was ranked as the fastest-growing tech community in Europe. A report titled “State of European Tech” report from London-headquartered global technology investment firm Atomico ranked Zug as the fastest tech hub in Europe.

The report praised the increasing blockchain-based startups as the main reason for the phenomenal growth of the tiny Swiss city. The city was also ranked as the most blockchain friendly city in Europe owing to its favorable laws.

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