The Swiss Crypto Valley Association, a Fintech and blockchain-focused organization based in a region located near Zurich, is reportedly asking Switzerland’s government to provide CHF 100 million (appr. $102.7 million) in relief funding.
This fund, if approved, would help with bailing out crypto and Fintech firms that may be struggling to maintain operations due to the Coronavirus (COVID-19) outbreak and resulting economic challenges.
Heinz Taennler, the Cantonal finance director, noted that the fund will be made up of private investments, various contributions from local government agencies, and federal guarantees.
Switzerland is known for offering a progressive regulatory environment that has helped many Fintech firms with establishing and growing their business operations. It’s considered an ideal place for the development of emerging blockchain-based platforms.
Many Bitcoin and blockchain-focused initiatives might not survive due to the Coronavirus crisis, as private equity investors have reportedly decided (or may be considering) to stop funding these businesses.
As mentioned in a report shared with Bloomberg:
“Of the biggest 50 companies operating in the region, only half said in a survey that they will make it through the next 12 months under current conditions.”
The Swiss government recently revealed that it would offer CHF 154 million in credit guarantees to early-stage firms or startups. However, this may not be enough, Taennler claims.
Many Fintech and blockchain startups are not in a position to generate enough revenue to be eligible for bank loans under the Swiss government’s Coronavirus relief package.
COVID-19 has had a major negative impact on Crypto Valley’s local crypto industry.
Earlier this month, Daniel Haudenschild, the president at the Swiss Crypto Valley Association, confirmed that crypto-related businesses were struggling to maintain operations during these challenging times.
Representatives of almost 80% of the Valley’s companies revealed that they’ll probably go bankrupt within the next six months.
The Association currently has a donation page set up on its website.