Ueli Maurer berichtet aus der Geschichte des Crypto Valley

Transcript

My name is Ueli Maurer. I was in the Federal Council for 14 years, and at that time, I was also responsible for finances. And now I'm enjoying my retired life with many hobbies that I continue to pursue, in the financial sector. I had very few people who said, “This is a huge opportunity for Switzerland. We have the technology we have the universities, we have to sort this out properly.” And with this handful of people, we then stormed forward. We also visited Silicon Valley to gain different impressions, to understand our position.

We had a lot of contacts with the industry, with the individual industry representatives, especially with the canton of Zug that played a pioneering role here. And then, the whole thing developed a life of its own. In the administration and with all the partners we had, we strongly believed that there is an opportunity here for Switzerland and that something can come of it if we are fast enough. Some people said, "Do we need regulation for the technology or simply for the individual processes?” And we were in fact the first country in the world to concentrate on regulating the processes

and not the technology. Technology can evolve. The national banks were not ready for these discussions at the time, and they are not ready today either. I don't think this is the time to talk about it. Because the National Bank, with its sluggishness, does have a certain stabilizing effect on the country, on the economy, on the financial sector. In my opinion, we have to leave it like that for the moment. But you have to create some wiggle room, you have to provide the guard rails so that this technology can develop and advance.

It simply needs guiding principles. You don't actually have to regulate all the things that are possible, but rather say very broadly, “This specific thing won’t work, for the rest, find a way.” Technology neutrality is very important. When the state begins to regulate technology, then it prevents further progress. We deliberately avoided that. And the technology has also evolved. Even though I have the feeling now that it has lost some of its momentum.

And I hope that the industry finds this momentum again, also in research. There were various players at that time in this space. The closest thing to us at the time was Liechtenstein. They created a blockchain law very quickly, albeit in a technology-oriented manner. We chose to be technology-neutral. It was a tight race for a quite some time. Then there were other players. But Switzerland has actually maintained this pioneering role, but not just because of politics or administration.

Rather, we actually worked very closely with the industry. We constantly organized round tables and maintained exchanges of ideas. What do you need, what do you want? What can we support? And I think this active exchange with the industry has afforded Switzerland a head start. I think that's very important for a small country that you have all players at the table. Us, the federal government, we only broadly coordinated. We had the canton of Zug in particular that led the way here. Zurich took also part, and later Geneva too.

Then there were Finma and the National Bank, especially back then, that actively helped here. And we repeatedly compared our progress with other countries. Of course there are differences, but I think Switzerland has claimed this pioneering role for a relatively long time. Now, of course, we are in an environment in which other countries also follow suit. The UAE in particular. China is not bad, also South America, and of course the USA. But little Switzerland cannot participate everywhere.

But when we do we have to be the best. That was and is still possible with the cooperation between the industry and the cantons. For me, the main contact person was actually Heinz Tännler from the canton of Zug, he was closer to the entire industry, provided a lot of input. Then Mark Branson, the director of Finma. He was a creative and great mind. There were also the people in the National Bank. And then additional contacts came along, with people from the industry who, I have to be honest, I didn't always fully understand in detail.

But I felt the euphoria, and that euphoria was contagious. These were people who were so convinced of their idea. I believed in it because they were convincing. Without understanding the details, I said: “We have to move forward like this.” I met people back then who are still at the top now. I relied on them and had these conversations too. You don't have to understand all the details, you just have to understand where the journey is going.

And you have to understand what this technology can do. How exactly is not important for a politician. But you have to understand what can you achieve with it and then you have to promote it. Yes, I was in Zug several times back then. I met all the people there. I don't know all the names anymore. I still have the faces in front of me, in these meeting rooms, the shining eyes and also their demands. "Now you have to move forward in Bern, and we need that, and we want that!"

And that was very contagious. I believe that in this specific climate, we were able to pass legislation at such a rapid pace. Switzerland is usually not one of the first to introduce regulations. And here we were among the first in the world to find a solution. A solution that was tailored for the real world. In the background, there were those shining eyes in Crypto Valley who believed in it and who were also very successful.

When I was abroad, people knew exactly what was going on in Zug, what's going on in Crypto Valley in Switzerland. They respected Crypto Valley a lot. We had Silicon Valley in San Francisco. They were looking for a counterbalance. Then we come to Crypto Valley. At the beginning everyone was excited. Then things slowed down a bit, because people doubted cryptocurrencies.

But they caught on eventually. In my opinion that is also a good term because crypto is not bad, cryptocurrencies are a good thing, their use and application. That is the question. And it's always the people who work with a technology. Cryptocurrencies will become increasingly popular with all the technology that is behind it. The question was actually, “What are we allowed to do and what are we not allowed to do?

Where are the limits?” There was a lot of uncertainty back then. There were countries that banned it completely. Basically: “Crypto is the devil’s business.” In other countries there was nothing regulated at all and people simply looked for the rules of the game for these cryptocurrencies and of course wanted them to be as broad and open as possible. We complied with that because I believe that when something new is created, there must be room for development. You can't slow down development. And back then we deliberately made the guidelines very, very broad and then made this legislation.

We also did this very closely with the industry back then. We had a lot of discussions and meetings. “How is this supposed to be solved? How should we describe that? What solves the problems in the real world?” And this first template actually turned out well, I think. 'Task force' is simply a term that is needed in government to say, “Now we have a special organization in our daily operations.” In this task force, we simply involved the key people to clarify rules of engagement and shorten the timelines.

And that worked well, too. I believe... 'task force' is the term of the administration, to say, “Now something is happening outside of the usual routine.” A task force always has a little more authority and can react spontaneously, and that was actually the whole point. We said, “To be quick here, we need a special organization.” This allowed all actors to be on the same page, otherwise a commission would be formed.

A commission must be elected by the Federal Council. They have to turn in an annual report. And that already makes it clear that it doesn't get anywhere and just grinds the wheels of bureaucracy. And if they form a task force, then you can bring all actors to the table. There are no administrative regulations for a task force, no bureaucracy. You can easily and move forward. And that was the approach that suited the industry very well. And us, too. I also have to say, that doesn't work with everyone, but it is possible with the canton of Zug.

A small canton with people who are like that. Something like this would be much more difficult in the canton of Zurich. The government council would also have to add their views. And that's the curse of administration, that it sometimes drowns in bureaucracy. And you always have to try to get around that. I once founded a kind of startup in the IT department in the administration. I put together the 15 best people and said, “Do it, and if you don’t make any progress after three weeks, let’s stop and start again.” This also triggered a dynamism throughout the administration.

You have to keep trying to break these processes in administration so that more dynamism can arise. The question was, “Are we making a blockchain law and actually regulate the technology in this law?” And we said, “No, we don't do that, we simply slightly change and clarify existing laws, so it is clear that the processes in the blockchain and crypto areas also fall under this. I don't really know which exact changes in the law these were at the moment.

It was certainly the Banking Act, possibly the Stock Exchange Act, the Financial Market Supervision Act. All the laws that deal with these processes have experienced a small addition to make sure crypto is also covered. This was the right approach. A separate blockchain law like in Liechtenstein, we were in close contact back then, who made a blockchain law, and they had to adapt it relatively soon again. Technology has developed faster, than was intended.

the resistance was relatively great, especially from the left. The Federal Council initially didn't want to change anything either. They said, “You have to wait first, we have to see how it develops. And customer protection is not guaranteed.” This attitude then echoed through the commissions of both councils. But in the end it went relatively well because we were able to convince them that we don't want anything revolutionary, but simply better regulation of what happens in practice anyway.

And we had the support from the middle, but there were very, very few people also in parliament who understood what we were actually doing there. And it was all about simply convincing people and explaining what we want. This surprise effect meant that these questions never came up at all. So we were actually at a stage where no one had really looked into it and you just had to believe that things will turn out well.

And we managed to do that back then. So all cryptocurrencies are based on solid technology, and this technology is manageable. It is understandable, it can be controlled, and on this basis, people have to deal with it. And in this regard, the processes are regulated. Who has which function, who has which right? How can you possibly claim losses again?

For this, you need a law on debt collection. And we have reflected these processes in the laws. Of course, you are never immune to someone abusing a technology. There was some kind of gold rush in the beginning, there were some who wanted to make money quickly. You can wait twenty years to start the legal process on new laws. You simply can't change people. You can set guardrails within which everything happens, and then you can control it.

And you can do that because we have a fascinating technology behind it that we will also use more and more in other areas, in administration, in business areas, in the economy. It is another brilliant step in computer science. Yes, Switzerland as a financial center has lost some advantages. Banking secrecy, that's over. And we have to be strong in other places if we want to continue to be the world's financial center.

New technologies reduce costs, increase transparency, increase speed. The digitalization of finance. And here we need a lead over the other countries. We're still there, but maybe not at the absolute top. There are further elements for the financial center that digital technology can support. This is the sustainability of financial products. All of this can be made more transparent and done faster with the help of digital technologies.

New technologies are key to a strong financial center. And yes, the quicker you adopt them, the more advantages you have. The big banks still have some room for improvement, I would say, viewed from the outside. I am convinced that we made the right decision. It was also much easier to adapt existing laws instead of introducing new laws and get it passed.

Things like these take a decade in Parliament. And we wanted regulation as quickly as possible. And we said back then, “With this path We may have to make minor adjustments again in two or three years but we don't have to rewrite an entire law. New laws have it difficult, and they also have more teething problems than if you build on existing ones and supplement them the way we did it. Switzerland has made an important impact here for the whole world, because when Switzerland as a traditional country serious, reliable,

predictable, stands at the forefront with a new technology, it encourages other countries. Seen in this way, Switzerland has played a pioneering role here because Switzerland enjoys more trust abroad than sometimes at home. And those were important impulses. Personally, I notice that I still have certain contacts. The still looks at Switzerland. But it's the same as always. We slowly get too comfortable.

I'm a little worried that we are already falling asleep. The community itself must continue to be active and demand further developments. Relatively little happens in Bern. But if a community has demands on the cantons and on the economy, then something can happen very quickly. And that is actually the job of industry, to continue to put pressure on this. Of course, given the size of the country and the size of this community, we must continue to focus on the heavyweights in the future.

We cannot cover the whole area, like perhaps American industry, the American community, including Singapore that are already very far, and China who has also joined. And I think it's important that you focus on what you're really good at and then take that forward. If we continue with the full breadth of all the new areas that are emerging now, then we may lose this leading edge. But I can't say much about where we are now and if we're still in a leadership position.

But Switzerland is actually a niche country. We produce in niches everywhere. And I think we have the same challenge here, that we are the best in niches and things that we are less good at or that require too much effort, we just leave them be. But Switzerland was a leader in these niches, it is a leader and must continue to be a leader in the future. That was undoubtedly the case. We had these young companies, these young people in Zug.

We had a finance director in Zug who saw this. We had the Finma, Mark Branson, who was doing very well, also with us in Bern at the State Secretariat, everything was right. And we really worked together very efficiently and believed in it. It was certainly a good constellation, we just have to create it again. The right people in the right place can do something like this again. But yes, we are basically lazy.

Unfortunately, that's the case, and it's not always a bad thing. But this enthusiasm is needed here, and I believe it can be done. We have a lot of young people, I also know them from the administration, I know them from Zug and from other cantons. Such opportunities have also emerged in other places. The international contacts that we still have should also help us stretch our goals a bit. We should continue working. Switzerland must become a state that rewards instead of punishing.

We have discussions about taxes, tax evasion, all sorts of things. It just has to be worth it to work in Switzerland and to earn money. Not only does it have to be financially worthwhile, but it also needs to be valued by society. And we're almost at a point where we assume someone with a good salary must be nefarious or up to no good. We have to become a performance state again that values performance. And that starts at school, where they talk about abolishing grades and all sorts of things...

It just doesn't work. A society thrives on performance and motivation. We only have sports where the highest performance counts and big emotions. People have big emotions, they cry, they jump around. In business, when someone achieves top performance, we assume that he has cheated somehow. This is the wrong mentality. I was never alone, I had to have the best people around me. I can just take the best ideas of these people and try to implement them.

But I'm honestly not smart enough to understand all of this. I have to rely on people and must be able to assess this. I must motivate them so that they then come up with the best solutions, that they continue to work on it, encourage them to succeed and then implement it. You should never think that you can know everything or do everything. You have to rely on other people and then go with them. You have to understand these people well. You have to understand what makes them tick, how they think, how willing they are to take risks, how they are in everyday life.

And then you can work with them. That would be possible, it could still be done in many areas if you have the right people in a room who have an idea, you make it real and simply work on it with a lot of pressure and also take risks. If it doesn't succeed, well, it didn't succeed. Then you just start all over again. But if you don't take any risks at all, you just can't move forward. Crypto Valley would be possible again.

With the right set of people you define goals and then move forward. Crypto Valley is not a one-off story. It would be possible again, but you need the right people. And then move forward and march.