The origins of Crypto Valley in Zug

A small canton and the first crypto firms

The canton of Zug had prepared the ground for Crypto Valley long before anyone spoke of blockchains. Since the 1920s its low taxes and business-friendly administration had attracted holding companies, commodity traders and domiciliary companies, which made the canton one of the wealthiest in Switzerland and accustomed its authorities to international clients with unusual business models.¹ When the first crypto entrepreneurs looked for a European base, the combination of a small, accessible administration, English-speaking professional services and proximity to the airport and banks of Zurich was already in place. The term “Crypto Valley” is commonly associated with the early entrepreneur Johann Gevers, who later became president of the Tezos Foundation, and whom a local history project describes as one of the first crypto entrepreneurs and initiators of the Crypto Valley.²

One of the firms that gave the new cluster its first institutional weight was Bitcoin Suisse. It was founded in 2013 by the Danish programmer Niklas Nikolajsen together with Fabian Hediger and Andrej Majcen, started in a small office in Baar and later moved to its headquarters at Grafenauweg 12 in Zug. According to the same history project, the company was involved in almost all the large crypto projects of the region and had grown by 2023 to more than 200 employees and more than five billion dollars of client assets.³ Bitcoin Suisse acted as broker, custodian and technical partner for public bodies, which made it the natural intermediary when the city of Zug and later the canton began to accept crypto payments. Its later attempt to obtain a banking licence, discussed below, marked the limits of that model.

The Ethereum Foundation of 2014

The decisive event for the reputation of Zug was the establishment of the Ethereum Foundation. In late January 2014 Mihai Alisie, one of the co-founders of the project conceived by the young programmer Vitalik Buterin, arrived in Zurich to assess Switzerland as a jurisdiction. The team valued the country’s position in the heart of Europe, its business-friendly environment and its reputation as a technology location. The Swiss foundation, Stiftung Ethereum, was formally established on 14 July 2014. Ten days later, on 22 July 2014, the so-called Genesis Sale began, which ran for 42 days. In March 2015 the team moved into a house in the canton that it called the “Ethereum Spaceship”.⁴

The sale raised about 31,000 bitcoins, which were worth some 18 million dollars at the time. The foundation was set up by the Zug lawyer Luka Müller, while Herbert Sterchi acted as its Swiss board member. Local tradition holds that the first salaries were paid out under a tree on the lakeside promenade of Zug.⁵ The choice of a non-profit foundation for a software platform financed by the sale of tokens set the template for the following years. It allowed the founders to argue that the funds belonged to no one in particular and were dedicated to the development of an open protocol, while the supervisory regime for foundations promised a degree of independence and permanence that a company could not offer.

Public authorities as early adopters

The public authorities of Zug moved ahead of the federal legislature. On 3 May 2016 the city council decided to accept bitcoin as a means of payment for municipal services up to an amount of 200 francs, for a trial period from 1 July to 31 December 2016. At the time the region counted around fifteen companies focused on blockchain technology. The mayor, Dolfi Müller, presented the step as a sign of openness towards the fintech sector, while Niklas Nikolajsen of Bitcoin Suisse described it as the first time worldwide that bitcoin had been accepted by a state authority.⁶ The amounts actually paid in bitcoin were modest. The symbolic effect was large, because the international press reported on it and the name of Zug became linked with the new technology.

The next step followed in 2017. On 7 July of that year the city of Zug announced that it would offer all residents a digital identity based on the Ethereum blockchain, developed by the Zug-based firm uPort, which belonged to the ConsenSys group, with the Zurich firm ti&m as implementation partner and the Institute for Financial Services Zug of the Lucerne University of Applied Sciences and Arts as research partner. Residents registered through an app that anchored their data on the blockchain, after which the resident registration office verified the identity. After the launch in September 2017, a consultative electronic vote was planned for the spring of 2018.⁷

The canton itself followed with a measure that touched the core of public finance. From February 2021 taxpayers in Zug could pay cantonal and municipal taxes in bitcoin or ether up to an amount of 100,000 francs. The canton received the equivalent in francs through a partner, which left the exchange risk with the taxpayer. The finance director, Heinz Tännler, openly admitted that the step also served marketing purposes, because a large part of the fintech industry was based in Zug and the canton wanted to support new technologies.⁸ These gestures had little fiscal significance. Their importance lay in the message that the authorities regarded the new industry as welcome and were willing to integrate it into ordinary administrative processes.

The Crypto Valley Association

As the number of firms grew, the industry organised itself. The Crypto Valley Association was founded on 1 March 2017 in the canton of Zug. Its first president was Oliver Bussmann, a former chief information officer of UBS and SAP, with Vasily Suvorov of the software firm Luxoft as vice-president and Professor René Hüsler, director of the School of Information Technology of the Lucerne University of Applied Sciences and Arts, as treasurer. The founding members included UBS, PwC, ConsenSys, Thomson Reuters, Luxoft and the Lucerne University of Applied Sciences and Arts.⁹ The presence of a large bank and an audit firm among the founders showed that the established financial industry of Zurich wanted to observe the new sector from the inside.

The association presented itself as an independent, non-governmental organisation built on Switzerland’s openness to innovation and its sound regulatory framework. Its purpose was to promote growth, cooperation and integrity in the blockchain economy. In 2026 it is governed by an eight-member board elected annually, with Jérôme Bailly as president, and has established regional chapters in Latin America and the Middle East.¹⁰ During the boom of 2017 the association also tried to establish a code of conduct for token sales, since Bussmann feared that investors did not understand that they were often making a donation to a non-profit entity. That concern leads directly to the events of the following two years.

Notes

The development of Zug as a location for holding and domiciliary companies from the interwar period onwards, favoured by the cantonal tax law, is well documented in Swiss economic history. ↩
Crypto Valley Pioneers, “Johann Gevers”, https://www.cryptovalleypioneers.ch/en/johann-gevers/. The attribution of the term itself to Gevers is widespread in the literature but is not stated on this page. ↩
Crypto Valley Pioneers, “Grafenauweg 12: Bitcoin Suisse”, https://www.cryptovalleypioneers.ch/en/grafenauweg-12-bitcoin-suisse/. ↩
Mihai Alisie, “Ethereum: The First Year”, Ethereum Foundation Blog, 14 March 2015, https://blog.ethereum.org/2015/03/14/ethereum-the-first-year. Alisie also mentions the creation of a Digital Finance Compliance Association in May 2014, intended to serve as an interface with the Swiss authorities. ↩
Crypto Valley Pioneers, “Seepromenade: Ethereum-Tree”, https://www.cryptovalleypioneers.ch/en/seepromenade-ethereum-tree/. The page states that Ethereum had a market capitalisation of about 330 billion dollars in February 2024. ↩
swissinfo.ch, “Zug first to accept bitcoin for government services”, May 2016, https://www.swissinfo.ch/eng/business/crypto-valley_zug-first-to-accept-bitcoin-for-government-services/42143908. ↩
Stadt Zug, “Blockchain-Identität für alle Einwohner”, media release, 7 July 2017, https://www.stadtzug.ch/newsarchiv/383355. ↩
SRF, “Kanton Zug akzeptiert Kryptowährungen bei Steuern”, September 2020, https://www.srf.ch/news/steuern-zahlen-mit-bitcoin-kanton-zug-akzeptiert-kryptowaehrungen-bei-steuern. The article reports field tests in the autumn of 2020 and the start of the service in February 2021. ↩
Finance Magnates, “Crypto Valley Association Founded in Swiss Canton of Zug”, March 2017, https://www.financemagnates.com/cryptocurrency/innovation/crypto-valley-association-founded-swiss-canton-zug/. ↩
Crypto Valley Association, “About Us”, https://cryptovalley.swiss/about-us/, consulted September 2026. The page dates the beginnings of the ecosystem itself to 2013. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.

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