Efforts made by Zug’s finance director, Heinz Tännler, to provide financial support for Switzerland’s dying Crypto Valley will no longer see the light of day.
The COVID-19 pandemic that is negatively affecting world economies has prompted governments around the world to make provisions for stimulus packages for Small and Medium Enterprises (SMEs) to cushion the effect of the crisis.
The Swiss government announced last month that they are taking similar steps and would provide CHF154 million ($159 million) in funding as long for the fintech startups in the country.
Just like every other sector, the Zug-centered Crypto Valley is struggling due to the pandemic, and private equity investors have since withdrawn their investments.
To salvage the blockchain hub, Tännler proposed in April, a separate support package worth CHF100 million ($103 million) to fund local blockchain startups. Unfortunately, Tännler’s proposal was rejected by other members of the Zug government because of the problems facing the industry.
The finance director noted that he did everything to provide relief for the blockchain hub in this pandemic, “but in the end, regulatory policy got out of hand.”
While the support for blockchain startups was rejected, the council approved about two dozen applications from non-blockchain related companies that applied for stimulus packages.
The refusal to provide relief for Crypto Valley could spell doom for the industry, as Tännler said that he is cautious of the effect the virus could have on the industry.
As per the report, the development has forced some sources to rename Crypto Valley to a “Death Valley,” as they believe government’s refusal to provide aid for the blockchain hub could lead to its natural death, unless blockchain startups seek funding from individual investors or obtain loans, in order to survive the impact of the pandemic.