Armin Schmid is the CEO of Swiss Crypto Tokens AG, a member of Bitcoin Suisse Group, one of the leading cryptocurrency proponents in Switzerland. Crypto Heroes caught up with him recently to get his take on some pressing issues facing the crypto and blockchain world.
The last year has seen some changes in the initial coin offering (ICOs) sector. What type of changes should we expect and how would they affect investors?
“I believe the shift will happen from utility and payment tokens to asset tokens,” Armin Schmid emphasizes, “there is a lot of demand to tokenize assets and therefore this would be the logical step.”
Schmid points out that last year’s FINMA ICO regulation created a sound and solid foundation but also presented some challenges for asset token issuers performing ICOs and chasing opportunities to trade on secondary markets.
Security tokens offerings have become very popular over the past few months, what sort of milestones should we keep our eyes open for?
“Instead of milestones, I would call them challenges,” Schmid explains, going on to list three major challenges worthy of consideration:
To begin, “the regulations in Switzerland and internationally have to be put in place with a view to treating products as are seen in the global context as well as in the domestic markets.”
The second challenge, in his opinion, is the ability to list tokens on exchanges. Schmid believes this is very crucial, as issuers of these digital securities need the ability to bring their products to the market.
The third and final challenge is the ability to trade these listed tokens. Schmid strongly believes that trading crypto assets on exchanges and in the secondary markets will allow the full value of the assets to be established and maintained.
You are a big fan of stablecoins and consider them to be important to the future of the crypto industry. How do you see the interfacing between stablecoins and established cryptocurrencies such as Bitcoin and Ether?
“Existing cryptocurrencies are essential for every blockchain as they are part of the incentive system to ensure stability.” Schmid notes that the links between the current blockchain ecosystem and the existing cryptocurrencies are going to stay, however, he asserts that “in order to build a new ecosystem and services on top of a blockchain, stablecoins will prove necessary.”
Some economists believe that stablecoins have a vital role to play in the growth of the blockchain sector. And so does Armin Schmid. The Swiss Crypto Tokens CEO believes that the exchange between Bitcoin and Ether to a stable coin is going to be one of the key elements which will work to underpin new channels of sustainable growth in the industry, explaining “traders and investors can leave volatile cryptocurrencies without leaving the crypto market and invest in stablecoins; they can then return when the market stabilizes.”
Schmid adds, “stablecoins are also essential for the future of the blockchain ecosystem. I very much believe this. That’s why we established the Swiss Franc backed stablecoin, the XCHF, otherwise known as the CryptoFranc. It exists to power the Swiss-based blockchain economy.”
At the local level, how is Bitcoin Suisse promoting crypto and blockchain in the country?
Bitcoin Suisse is one of the oldest companies in the Crypto Valley. The name Crypto Valley, a play on California’s Silicon Valley, was coined by the founder: Niklas Nikolajsen.
Schmid says, “Bitcoin Suisse has so far led by example and is going to continue leading by example, delivering good services and making sure that others can build with us and create new services. We will continue to offer ICO support, brokerage, storage solutions and pursue exciting projects such as the recently launched CryptoFranc.”
Bitcoin Suisse endeavors to promote the crypto and blockchain industry both domestically in Switzerland and internationally, jockeying for position on the forefront of innovation with products and services.
Switzerland has become one of the most crypto-friendly countries in the world, what can the government and the local crypto sector do to stay ahead of the other major competitors?
Schmid points out that Switzerland needs to adjust the existing financial regulations in the country to cover the cryptocurrency sector. In his view, Switzerland already has an established, well-working infrastructure and set of rules, they simply have to adjust the framework to incorporate support for blockchain-based services. If the country can adapt their regulations in a way that simultaneously fosters blockchain innovation while maintaining the stability and security that the Swiss have become well-known for, then it will prove difficult for other jurisdictions to compete.
Schmid maintains that Switzerland should listen to the community and work with the industry to find out where the problems are and how they can be solved together in a joint partnership. He reveals that there is indeed an active interaction in the country regarding the crypto sector, stating “there is a very open dialogue, especially in the crypto valley, complemented by the interaction between the industry and the government. Swiss regulators should continue this path and not stop.”
In closing, Schmid offers a plea to regulatory authorities to a fast-track development: ”Switzerland is already on the right path, but speed matters!”