Swiss Crypto Valley Seeks for Funds to Withstand Current Turmoil
Officials at “Crypto valley” are in serious talks with the Swiss government for a 100 million Swiss Franc fund. This was confirmed in an interview held by local newspaper SonntagsZeitung.
According to the reports by Heinz Taennler, Cantonal Finance Director, the fund would come from various sources. This includes contributions from federal guarantees, local governments, as well as from private investments.
As private equity investors are gradually pulling out from funding blockchain and Bitcoin companies, they are fighting for their survival. Among the 50 top companies that operate in the region, only 50% of them affirmed they are financial, not stable enough to make it past the next 6 months, based on the present conditions. This means that half of them could go into liquidity if they don’t seek funding.
Earlier this week, the Swiss government reiterated its commitment to strengthening startups in the country. To show its level of commitment towards that, it wants to provide 150 million Franc in the form of credit guarantees for these startups. However, Taennler said although the move is a good one, it will not be sufficient to quell the situation and prevent many of the startups from going into bankruptcy.
Present financial turmoil blamed on COVID-19
The president of the Crypto Valley Association, Daniel Haudenschild, said that most of the companies are feeling the impact of the pandemic as the majority of them claimed they would be forced to shut down within the next few months if the situation continues. He recently conducted a survey and received answers from about 203 crypto valley representatives. From the report, about 80% of them said they are more likely to get bankrupt within the next 12 months than survive the present conditions.
Although the survey was not an exhaustive one, it throws more light on the real situation of things as the region battles their plight following the recent pandemic crisis that has stalled business activities. Haudenschild said the impact would yield effects. The first impact is that most businesses in the crypto valley will strive to survive as they are coming from a long crypto winter. Next, the businesses will be forced to go digital following the impact of COVID-19 in the business environment.
He further stated that the majority of the actions to be taken will rely on the businesses because they have to reinvent themselves. Haudenschild pointed out how the association has been able to help them get back on track by extending memberships and seeking funds from the government.
“We have extended all memberships by six months, to allow members to focus on the priorities of getting their house in order,” he concluded.