The Switzerland government has rejected the 100 million Swiss Francs ($102.7 million) funding request made by the country’s famous Crypto Valley, according to a local media report.
Located in the heart of Zug, Crypto Valley is a fintech friendly region with favorable regulations for cryptocurrency and blockchain startups, making it a much-celebrated blockchain hub.
Despite the open arms towards blockchain technology, the recent COVID-19 pandemic has forced many private equity investors to withdraw their funding, which has made it difficult for fintech and blockchain companies to survive.
Crypto Valley Loan Request Rejected
In April, Switzerland said that it would provide 154 million Francs credit packages for fintech startups to help them stay afloat during the COVID19 crisis. Following the announcement, the Zug finance director, Heinz Taennler, moved to request an additional 100 million Swiss Francs ($102.7 million) loan that could be converted to shares to save the dying crypto industry.
In a meeting last week, members of the cantonal government reviewed about two dozens applications for the special COVID-19 support packages from different sectors of the economy.
Unfortunately, all the applications received approval except for the credit request for blockchain startups. The majority of the Zug government council did not support Taennler’s proposal, citing problems facing the industry.
Crypto Valley Turned Death Valley?
The unfavorable feedback from the Zug government regarding the loan means the idea is now off the table. The country’s once-flourishing blockchain hub will now likely continue to struggle amid the pandemic since private investors already pulled out.
There are already ongoing speculation of how the rejection could be an impending doom for Crypto Valley, with some saying it might soon turn to a “Death Valley” if funds from venture capitals do not flow into the industry.
While the Switzerland government has failed to support the country’s blockchain industry, countries like China are investing heavily in blockchain projects.
Last year, China’s President Xi Jinping, endorsed blockchain as an essential tool in technology innovations and industrial revolutions while urging the country to invest more in the industry. Following the announcement, China announced that it would invest more than $2 billion in blockchain development in 2023