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Verena Schwanzar

CO accounting for cryptocurrencies

By | Public Announcements

Authors: Markus Vogel (Co-Chair Working Group Tax / Accounting / Structuring and Partner Tax KPMG AG), Heiko Petry (Board Member Working Group Tax / Accounting / Structuring and Audit Senior KPMG AG)

The accounting for cryptocurrencies is not specified in the Swiss Code of Obligations (CO). Hence, an interpretation of the existing rules and the recognised financial reporting principles of Art. 958c is required. The following analysis focuses on payment token and uses Bitcoin as an example.

Balance sheet eligibility
Art. 959 (2) specifies the capitalization criteria for assets. Items must be entered on the balance sheet if the entity can dispose of these items as a result of past events, if cash inflow is probable and if their value can be measured reliably. Since Bitcoin and other cryptocurrencies alike are either bought, received in exchange or mined, can be sold or exchanged for goods and services, can be controlled via private key and have an observable market price, the capitalisation criteria can be considered fulfilled.

Dependent on the intended use, Bitcoin and other cryptocurrencies alike can be accounted for in the following financial statement captions (FSC).

Current assets with a stock exchange price resp. (non-current) financial assets
In Swiss accounting practice the term securities (‘Wertschriften’) is not limited to commercial papers, but also embraces promissory notes and even precious metals and tradable raw material.[1] These items have in common that an observable market price is available resp. that their fair value can measured reliably. The existence of a counterparty is not necessarily needed. Thus, Bitcoin (for which an active market exists) can be accounted for under securities in the current respective non-current assets depending on the intended investment horizon.

This FSC comprises inter alia raw materials, supplies, service products, finished products and commodities that are usually consumed or sold in the normal operating cycle of an entity. Depending on the ordinary course of business of an entity (e.g. regular trading, mining or using the Bitcoin mainchain to anchor sidechains), it can be appropriate to account for Bitcoin as inventories.

Intangible assets
Bitcoin units are identifiable and without physical substance. Even though they partly fulfil the attributes of money (medium of exchange, store of value and unit of account), they are not comparable to the Swiss franc or foreign currencies, due to their missing legal tender status[2] and central bank support. They show a lack of broad acceptance, high volatility, (currently) low transaction speed and high (domestic) transaction costs. Consequently, Bitcoin is discernible to (fiat) money and fulfils the characteristic of non-monetariness required for intangible assets. Hence, Bitcoin can be accounted for as an intangible asset, although the FSC (non-current) financial assets certainly better meets the properties of Bitcoin held as a long-term investment.

The following FSC are not appropriate to account for Bitcoin:

Cash and cash equivalents
See explanation pertaining intangible assets.

Trade and other receivables or prepaid expenses
For Bitcoin and other cryptocurrencies alike no issuer or counterparty exists which was obliged to accept it as a means of payment or to exchange it for fiat money. The owner of Bitcoin units cannot enforce any claims against other users or the network. Balances that are stored at a wallet provider, who has sole or joint control over the private keys, are generally just held in fiduciary custody by the service. Neither can the service freely dispose thereof nor does it bear the risk and rewards of price fluctuation. Moreover, with the means of an internal ledger, the respective balances of each customer can be allocated even if the service used a pooling address.

Under CO, assets are initially measured at their acquisition or manufacturing costs according to Art. 960a. This value generally represents the upper valuation threshold, which may be adjusted for amortisation, depreciation and, if necessary, impairment.

Art. 960b allows a subsequent measurement at the price as of the balance sheet date for certain assets with a stock exchange price or otherwise observable market price in an active market. This also applies to Bitcoin and other cryptocurrencies, independent of in which FSC they are accounted for (while considering Art. 960b (1) second sentence). The Swiss Federal Tax Authorities publish year-end prices for certain cryptocurrencies that can be used, but it would also be appropriate to apply the price of a specific market place where the entity usually trades its units.

For assets measured in accordance with Art. 960b, a valuation adjustment can be made in order to compensate for future price fluctuations. The valuation adjustment is considered a business-related allowance and thus basically fiscally accepted.[3] The profit-effective valuation adjustment may not exceed the difference between the price at balance sheet date and the acquisition or manufacturing costs.




[1] Gutsche (2014) Art. 959a Rz. 46-49. Rechnungslegung nach Obligationenrecht. Praxiskommentar mit Berücksichtigung steuerrechtlicher Vorschriften. Verlag SKV: Zürich.
[2] The status as a legal (= non-illegal) means of payment in some countries does not constitute the status as legal tender coupled with a general obligation of acceptance.
[3] Treuhand-Kammer (2014) Schweizer Handbuch der Wirtschaftsprüfung. Band “Buchführung und Rechnungslegung”. Treuhand-Kammer: Zürich. IV.2.18.1.

Blockchain and Indoor Farming can Help Feed Nine Billion People

By | Member News, Public Announcements

By Erhan Cakmak, CEO and co-founder, Pavo

By 2050, the world’s population will exceed 9 billion people, some 20 percent higher than today. Most of this population increase will occur in rapidly-urbanizing developing countries. About 70 percent of the world’s population will be urban by 2050, compared to roughly half today. To feed this larger, more urban, and richer population, food production must increase by 70 percent. Annual cereal production will need to rise 50% to support population growth, despite the fact that yield growth has been steadily declining. Blockchain-enabled applications will play an important role in addressing this challenge.

This has important implications for Turkey’s agriculture industry; the majority of Turkish people still work, one way or another, in agriculture. Like the United States and Canada, Turkey, thanks to its fertile soil, favorable climate and plentiful rainfall, is food self-sufficient. Some 36 percent of the country is arable land, and Turkey is the world’s biggest producer of hazelnuts, figs, apricots and raisins and the fourth largest producer of fresh vegetables and grapes. The Turkish government has set a goal for 2023 of USD 40 billion in annual agriculture exports. The country has a significant role to play in addressing coming global food and caloric demand challenges, and technology can help.

Food supply chains are inefficient and suffer from quality control problems, especially in developing nations. One of the clearest real-world applications of blockchain technology is to add greater visibility and efficiency across supply chains. Although agriculture is a $5.5 trillion-dollar global business, employing over a billion people, it remains highly inefficient. For many smallholder farmers in developing countries, affordable access to capital remains a huge challenge.

Blockchain solutions can solve these financing difficulties. As it stands, farmers often wait weeks or months for payment after delivery, forcing them to deal with large incumbents with greater bargaining power. This directly translates to lower income for farmers, as they do not receive their fair share despite being the most important part of the chain.

Further, as the world urbanizes and becomes more conscious of the carbon footprint of transporting goods over long distances, indoor farming is playing an increasing role. Blockchain solutions and smart contracts allow for careful management of water and energy. Automated data collection and analysis creates the ability to better manage crop inputs, like water and energy, and corresponding automation of indoor farming operations. For example, a farmer using indoor hydroponics and a closed loop system may be able to reduce water usage by up to 90 percent. Increasingly, global food demands will be met by crops grown indoors, in environments more efficient and more controlled than the outdoors. By moving plants indoors, traditional dependence on the weather can be eliminated. With sensor arrays, plants can “communicate” precisely what they need 24/7.

Blockchain solutions and the “Internet of Things” (IoT) will save time and money for farmers, and increase yields. Despite a common belief that farmers are slow to adapt, they have always been eager adopters of technologies that make sense and deliver genuine value. Data democratization of the food chain will increase efficiencies, reduce waste, and increasingly transfer remuneration to the stakeholders delivering the greatest value.

Blockchain solutions allow to build a new model of trust in agricultural supply chains. Under the old Information Technology paradigm, agricultural, environmental, and regulatory data is stored on centralized computer servers, and managed by administrators trusted to maintain data integrity, security and access authorization.

This centralized data administration is a source of risk – crop safety and quality data can easily be corrupted. Data can be lost due to failed or absent backups. Centralized administrators may act on their own agendas, with their own interests in mind, impacting decisions related to data access and security.

Applying blockchain technology to crop data ensures that information about our food and its sources is incorruptible. Blockchain and IoT technology simplifies data management throughout the complex system of farmers, brokers, distributors, processors, retailers, regulators, and consumers. Information on the food we eat becomes simplified and transparent. Consumers can enjoy greater trust in the food they put on their table and regulatory agencies gain greater confidence in the data reported to them.

Blockchain redefines trust across the agriculture spectrum with arm’s length cryptographic security, eliminating any potential pursuits of self-interest on the part of data administrators or other actors.

Blockchain enables real-time payments, concurrent with delivery, and better visibility to buyers, leveling the playing field for farmers. Farmers get paid sooner, and increased competition for their crops raises the prices they receive while simultaneously helping consumers to pay lower prices for food through a much more transparent, secure and environmentally sustainable supply chain.


Crypto Valley Association Welcomes ConsenSys as Strategic Partner

By | CVA in the News, Public Announcements

ConsenSys to chair new Enterprise Blockchain Working Group, join Regulatory and Policy Working Group

Zug, Switzerland – 25 April, 2018 – The Crypto Valley Association (CVA) is proud to announce that ConsenSys is joining the Association as a Strategic Partner.

Comprised of over 750 blockchain experts, entrepreneurs, computer scientists, designers, engineers, consultants, educators, and business leaders with delivery experience across six continents, ConsenSys is the world’s largest blockchain venture production studio. Its vision is to use blockchain technology to create a world in which distributed applications and the Ethereum world computer support a new class of frictionless, global commerce with inclusion for all.

Oliver Bussmann, President of the Crypto Valley Association, said: “We are delighted to welcome ConsenSys as a Strategic Partner. With its size and scope, ConsenSys occupies a special place in the blockchain community, both in terms of development of public blockchain on Ethereum as well as in the enterprise and government blockchain space. The company has an incredible depth of understanding and expertise not just in the technology, but also in the universe of blockchain use cases as well as the broader implications of decentralization. As a Strategic Partner, we believe ConsenSys will bring great value to our members and to the wider Crypto Valley ecosystem.”

Joseph Lubin, CEO of ConsenSys, said: “We are very excited to become a Strategic Partner of the CVA. ConsenSys has always had a special affinity for the Crypto Valley, which has been the home of the Ethereum Foundation since its founding in 2014. We have watched the Crypto Valley ecosystem grow to become one of the most important and respected pillars of the global blockchain community. The CVA has played a key role supporting this growth through its community building activities as well as thought leadership. We look forward to working closely with the CVA on its mission to promote a successful and sustainable blockchain industry in Switzerland as well as support the broader global crypto community.”

As a Strategic Partner, ConsenSys will chair the CVA’s new Enterprise Blockchain working group, which will serve as a forum for CVA enterprise, corporate and other members to share case studies of enterprise blockchain projects and examine current and future use cases.

Ken Timsit, Managing Director at ConsenSys, said: “Over the last 12 months, ConsenSys has been very active in Europe, where we now have four offices and subsidiaries, and over two dozen ongoing projects in eight countries. We are delighted to be supporting the CVA and look forward to working with peers as we examine the use of blockchain technology to reinvent industry value chains and create new business models.”

ConsenSys, which through The Brooklyn Project and other initiatives has been actively involved in the blockchain policy debate in the US and in Europe, will also be joining the CVA Regulatory and Policy Working Group.


Crypto Valley Association President Oliver Bussmann is available for interviews

ConsenSys CEO Joseph Lubin is available for interviews

About Crypto Valley Association:
Founded in January 2017, the Crypto Valley Association is a not-for-profit association established to support the development and dissemination of cryptographic technologies, blockchain, and other distributed ledger technologies by supporting startups and other companies in Zug, Switzerland and internationally. Crypto Valley’s mission is to shape an open, free, and prosperous economy spanning multiple sectors.

Board members of the Crypto Valley Association are:
Oliver Bussmann, Founder & Managing Partner Bussmann Advisory; Vasily Suvorov, Vice President Technology Strategy Luxoft; Professor René Huesler, Director of the Lucerne School of Information Technology, Lucerne University of Applied Sciences and Arts; Sam Chadwick, Director Financial & Risk Innovation Thomson Reuters; Søren Fog, CEO iProtus.

Crypto Valley Conference 20-22 June:
The Crypto Valley Association (CVA), in cooperation with Lucerne School of Applied Sciences, will hold the Crypto Valley Conference in Theatre Casino in Zug, Switzerland, from 20-22 June 2018. The conference brings together leading researchers, developers, lawyers and innovators from across the globe to share and discuss state-of-the-art developments and advances in the blockchain technology ecosystem.

About ConsenSys:
ConsenSys is a venture production studio building decentralized products, platforms and infrastructure for blockchain ecosystems, focusing primarily on Ethereum. ConsenSys is interested in the identification, acquisition, and development of talent and projects on an ongoing basis, in addition to the development of internal projects and consulting work. ConsenSys is based in NYC, with offices in Paris, Dubai, London, Dublin, San Francisco, Toronto, Sydney, Manila, and other major cities around the globe.

Follow ConsenSys: GitHub, Facebook, LinkedIn, Twitter,

Media Contact:

Liam Murphy
Account Supervisor // Wachsman
+353 87 119 2107


Crypto Valley Conference – Secure your ticket, or host a satellite event!

By | Public Announcements

Dear members of the Crypto Valley community,  

With just two months to go, the Crypto Valley Association will host the Crypto Valley Conference from 20-22 June 2018 in Zug, the first blockchain conference driving progress through academic excellence. The conference will feature blockchain academic and industry leaders attracting investors, start-ups, and global blockchain enthusiasts. Be sure to secure your full access ticket  now, as you won’t want to miss the full-packed program, including a boat cruise dinner on the Lake of Zug. Members of IEEE and CVA will receive a $200 discount on the full access ticket price.

Make the Conference Your Own: Host a Satellite Event

CVA members have the opportunity to host or sponsor a satellite event during the conference. It is a great way to promote your company and gain exposure in the community using the Crypto Valley Conference brand. You can choose from a number of attractive satellite locations and time slots to run your seminar, workshop, social, or recreational event. Get more information here. The number of the slots is limited. Members should reserve and subscribe before 30 April on a “first come first served” basis.

SICTIC Investor Day with Blockchain Challenge

Do you know an innovative blockchain start-up who would like to pitch to the Swiss ICT Investor Club (SICTIC) with a chance to win CHF10,000-20,000? If you think they have what it takes to win, don’t miss the upcoming deadline of 30 April 2018 to submit your application. The SICTIC Investor Day with Blockchain Challenge is a special satellite event of the Crypto Valley Conference, taking place on 21 June 2018. More details of the event are published here.

Get informed with the latest details and announcements regarding the Crypto Valley Conference on the official Crypto Valley Conference website. Engage with the community on twitter @thecryptovalley and share your experience using #cryptovalleyconference.

We look forward to seeing you at the conference in June!

Kind regards,

Crypto Valley Conference Organisation Team