Switzerland prepares rescue for companies from its "Crypto Valley"

The Swiss Crypto Valley , which was born a few years ago to make that country the "European Blockchain Mecca" is in trouble . The crypto zone of the alpine country, located in the city of Zug, is experiencing difficult times due to the COVID-19 pandemic and the state of the Swiss Confederation has already announced measures to help in this crisis and try to dismiss and close companies be as few as possible.

According to a report prepared by the Swiss Blockchain Federation, 9 out of 10 companies in this sector will not survive the coronavirus crisis unless the state provides them with financial aid and 80% of firms think that if that aid does not arrive , in six months they will go bankrupt. In addition, almost all of the respondents (90%) plan to make layoffs in the coming weeks and 60% have already had to make some cut in their workforce.

These data forced the Swiss Federal Council , the country's highest executive body, to design a rescue plan for fintechs and startups in the sector. The plan consists of the creation of an aid fund of 154 million francs (almost 146 million euros) to distribute among the different Swiss cantons.

However, this proposed aid does not seem sufficient to the Zug government, which needs at least 100 million francs (95 million euros) for its companies.

Another problem facing the sector is that many of these fintech companies are still in a very underdeveloped stage, so a loan could lead to debt and a burden that is difficult to overcome in the medium term.

The proposal of the companies of the Crypto Valley , on the other hand, is that this aid can be converted into social capital in the case of companies that still do not have sales or these have fallen dramatically due to covid-19.

For his part, Heinz Tännler, a member of the Democratic Center Union, is designing an alternative  aid package for the Crypto Valley:

We want to combine the solution proposed by the federal government with a new vehicle in which private investors can also participate. Private money would take care of half of that life preserver.

His idea proposes that half of the aid would go to the public coffers. About 30 million would be in charge of municipal and cantonal finances, while between 10 and 15 million would come from state aid.