Ralf Glabischnig talks about the History of Crypto Valley

Transcript

My name is Ralf Glabischnig. The group of companies I'm working for is the Inacta Group. We founded it in 2009 in the year of Bitcoin, but with no attachment to cryptocurrencies in this time. I moved in 2005 to Zug. This was exactly when I moved from Germany from Cologne to Switzerland. Before the 7 years I have been travelling between Germany and Switzerland and other European countries, as a consultant for digital transformation. First contact with crypto and blockchain technology The first time that I heard about it was in 2014, and I was talking with people mining Bitcoin in this time and saying,

"I'm spending my money when I'm in the U.S." Honestly, I didn't look closer at this in this time because for me it wasn't clear what it is, what's going on, what's happening there. Then in 2015, when our Lakeside Business Center was open and we experienced people knocking on the door and saying, "hey, we want to set up a company and we're searching for a place, are there other blockchain companies in this building?" We saw there's something going on.

And to explore then, what's going on, we said let's do this blockchain competition where we give this idea out in insurance and blockchain. And this idea was basically for us to explore what's going on and then we got 130 applications from different companies worldwide. Giving us ideas what blockchain can do in the insurance industry. And why did we choose the insurance industry? Because our main customers on the Inacta side are insurance companies or have been at this time. And so we could bring together the corporate world with this startup world, and exactly that was what interested me at this time and what I also find fascinating today.

How can we get this technology into the corporate world? Crypto in the UAE (and differences to Switzerland) I mean when you look in the global crypto and blockchain space, we have a very different situation than in the normal startup space. And the reason is that the regulator in the U.S. is very unfriendly to the blockchain space. So the SEC is not very welcoming. That means we have other hubs worldwide that are taking this. One is Switzerland with the very early regulations, and activity of FINMA and the ICO paper and so on.

Another one was Singapore, and one of the strongest ones at the moment is the UAE. And the UAE with Dubai, with Abu Dhabi, with the free zones over there. And we probably had a very active role in that because we brought the ideas and the regulation, ideas, and the network to the Middle East, so that this can grow there and flourish there. And what is the reason for that? You know, Switzerland is a little bit hesitant when it's about growth.

You see that when you see advertisements from political parties that are saying, "stop the 10 million Swiss nation," for example. So not more than 10 million people living here. And the Middle East, especially the UAE, is totally different because the target of them is to double their people every 10 years. So when I was there the first time in 1998 there have been 800,000 people. In 2009 there have been 1.8 million people.

Now they are 3.5 million people. So they really try to double all 10 to 12 years. And this is an interesting opportunity for Switzerland because when you look into Switzerland, Switzerland is used to being an export country. Switzerland has a small market. When we see what this blockchain technology is bringing, with this integrated trust and the opportunity to do direct transactions, to eliminate middlemen, to bank unbanked.

Then, when we are very honest, we are not really solving issues in Switzerland. Every one of us has bank accounts, every one of us has credit cards, every one of us is able to send money into other countries. So the limitations of the financial sector in Switzerland are not really there. But in other countries these limitations are really huge. Already in the Middle East it's much more complicated to bank. And the Middle East itself is a bridge to Southeast Asia, to Africa, to Pakistan, to India, all countries where financial freedom for personal people is not there yet.

So I see it personally as: Switzerland is the fundament of the blockchain industry, the Layer 1s, the regulated businesses. They have a home in Switzerland where they can operate on a stable basis, where they know the regulators, where they know the banking system, and it works out. But if it's about growth, if it's about applications, if it's about getting the next billion people on top of this technology, this is not going to happen out of Switzerland.

We have 9 million people. We need a country where we are able to grow in that direction. And when you look into Dubai, it's a melting pot of Indians, Pakistani, of experts from all over the world. And at the moment you see there are Russians, Indians, Ukrainians all working together, and this is outstanding. I think it's in terms of being able to do business more neutral than every other place in the world at the moment. And this is the opportunity I see. And that's the reason where we said, "look, the Crypto Valley, this is Switzerland.

And we take the concept, the concept was taken from Silicon Valley, Crypto Valley, and now to Crypto Oasis in the Middle East." This is our story which we are supporting. Has Crypto Valley run its course? No, not at all. Probably for me important is: Crypto Valley is not Zug. Zug is the heart of Crypto Valley, my description was always: It goes from Geneva to Baduz, and from Basel to Komo. So we should see the whole of Switzerland as Crypto Valley, including Liechtenstein, because it plays a very important role.

And when you now look into that, the power of companies we have here, like the regulated Sygnum bank and the other service providers, Bitcoin Suisse, which is still one of the leading staking companies in the world, number four or five. We see Plan B in Lugano now where the Tether and Bitfinex guys are really ramping up some interesting stuff. We see the universities, to come to Basel, University of Basel, one of the first universities very active in the space. But also ETH, EPFL, University of Zurich, all the universities for applied sciences in Switzerland.

So education in our space is everywhere, with Liechtenstein and the blockchain act in Liechtenstein, a very early part of that. So there's still a lot of things going on in Switzerland, but scaling on startups in the B2C sector was never a strength in Switzerland. Also in the normal startup space. What did startups do? They moved to the Silicon Valley. They moved to the U.S. The money wasn't here, the market wasn't here, and I personally believe there's one of the biggest shifts.

I mean, 20 years ago, I remember a lot of my friends wanted to go to the U.S. They wanted to have a green card, they wanted to work there. The sentiment today, when you meet someone from the U.S. and we see a U.S. passport, is, "I'm sorry that you have that passport. I hope you get rid of it." And so for me personally, the American dream moved to Dubai, in a very simple sentence. But Switzerland is probably less a dream, but more stability and more long-term strategy.

And for me, the combination of these two countries is perfect. So people often ask me, "Ralf, are you only in Dubai now?" No, not at all. "Ralf, are you only in Switzerland now?" No, not at all. I don't want to change my life. Living between those two places is the best I can imagine for myself at the moment on this planet. Crypto payments You know, we talked about the first crypto payments in Zug and the city of Zug accepting Bitcoin, which was a great marketing case, but not really a transaction case.

But still, there are Bitcoin payments running in Switzerland and quite relevant until now. For example, the Ferrari dealership or the Mercedes dealership in Zug are accepting Bitcoin. One of our companies, called InnerPay, is the service provider there and doing that, together with Bitcoin Suisse. Or the other thing is when you go to the Hotel Dolder in Zurich, you can pay for a weekend there. Or when you go to some of the watch brands or some of the jewelry brands, you can pay with Bitcoin over there.

And I think this is the sweet spot at the moment, because it's not paying for coffee, five Swiss francs. There are enough other options and it's not above 100,000 francs. Because above 100,000 francs you have the broader KYC and AML, but the sweet spot between 10,000 and 100,000 francs is a very interesting thing for crypto payments. And now I think Lugano is following on that in a massive way, there are more than 400 shops already accepting USDT as well and crypto. So I still believe it doesn't solve a big issue in Switzerland, but there are certain niches where it makes sense.

And we have been one of the early players, so in the SHED Club you can pay with crypto, in the Lakeside Business Center you can pay with crypto. A lot of our customers are paying us with crypto, and so it's coming day by day into the normal process of doing business in the Crypto Valley. The future for cryptocurrencies and blockchain technology Yeah, there are different futures at the end of the day. You know, probably a topic we didn't mention until now is CBDCs on one side, and the Bitcoin principle of

decentralized money on the other side. I believe those are two totally different things and I see a future for both. I think CBDCs, so Central Bank Digital Currencies, are going to be in a lot of different countries in the next five years. And on the other side, the opportunity to pay with a cryptocurrency or to do transactions better with a cryptocurrency which is not controlled by any government, is still very relevant on a worldwide scale.

I see that, for example, with Dubai being on the grey list, FATF, and they see a lot of transactions between Switzerland and Dubai are not any more possible. But if you transact with USDT, if you transact with a stablecoin, or with Bitcoin, no one can stop that. And I said it before already, the longer you are in the market, the more you are going to be probably a Bitcoin maximalist. I fully believe in Bitcoin. I also believe in other blockchains as transaction platforms. And Ethereum and the Layer 2 story is a very strong community, a very strong story.

There are other Layer 1s that are very promising. We saw Sui, we saw Aptos, Dfinity and many others. I think it's an interesting battle what we are going to see. I don't believe that we need all the protocols and Layer 1s we see right now. I certainly believe we need a diverse opportunity on the Layer 1s. And at the moment, I think there's the focus. What are the platforms? Gaining traction and getting the real-world use cases. And I hope that a lot of those very real-world use cases will be built and headquartered in Crypto Valley.

And this keeps Crypto Valley on the forefront and strong in that area.