The banks of Geneva are famed for their secrecy. Chauffeured limousines wend their way through cobbled side streets to reach discreetly marked addresses.
So why has this Canton, the second-most populous region in Switzerland, decided to trial Blockchain to power its government? The distributed ledger technology is known for its ability to make financial transactions more transparent.
That’s exactly the value for the government here. From business registrations through to state-promoted initial coin offerings (ICOs), Geneva is committing to this technology in a big way. GovInsider spoke with Gianfranco Moi, innovation lead in the city government of Geneva, to find out how they are increasing transparency in their processes, and trying to bolster citizens’ trust.
Register your business in a day
The city is trialling the use of Blockchain in three ways, first in its business registration systems. This is in partnership with digitalswitzerland, a nationwide initiative to spearhead innovation in the country, says Moi.
Government is using the Blockchain to store key citizen datasets to make permit authorisation faster. Business owners often need to register their business with a public notary; visit a bank to get a loan; get insurance for their employees; and meet with tax registration authorities. “All these steps usually happen sequentially,” Moi says, but “with the Blockchain we are trying to make things happen in parallel” – making this much faster and easier for citizens.
Second, the city is using Blockchain for its digital identity system. This proof-of-concept will see the state’s existing electronic signature service be combined with the Blockchain. “We are trying to use it now with large companies that are established here in Geneva for commodity trade finance,” says Moi, adding that this industry brings in 20% of Geneva’s income.
This project goes live within the next few weeks, allowing the city to see if Blockchain can help to “raise the level of trust people have” in carrying out online transactions, he continues.
Third, the regional government will automate requests for official documents, which is labour-intensive and time-consuming. “We thought we could offload some of the work,” Moi says. Banks require lots of documentation for their transactions, and the state wants them securely hosted without manual processes involved. It is using the Ethereum cryptocurrency network to do this.
Supporting private sector
The Canton also wants to promote the use of Blockchain and cryptocurrencies within Geneva, befitting its status as a financial powerhouse. As a first step, the city wants to make it easier for businesses to lead initial coin offerings (ICOs), which is a way to raise funds from cryptocurrencies.
The city has published a guide that tells people how they can crowdsource for funding on cryptocurrency markets. “We developed a document that basically explains how to go about setting up an ICO in Geneva,” Moi explains. With this, the city hopes to become more “attractive and Blockchain-friendly” to startups.
“We developed a document that basically explains how to go about setting up an ICO in Geneva.”
The city has also set up advisory boards made up of experts from public and private sectors to help startups and entrepreneurs to understand the legal, banking, academic and technical aspects of ICOs. They can advise on tax or compliance issues for instance, he adds.
For Moi, the end goal is to become “more citizen- and business-oriented”, particularly as the Swiss government is “behind on digital transformation”, he admits. Blockchain is helping the city to be an attractive place to do business, similar to how Singapore and London have built environments for startups to flourish, he says.
This is important as most of Geneva’s economy relies on exports to the rest of Europe, and many workers commute from neighbouring France. But as Switzerland is not part of the European Union, “we are struggling with compliance issues” around the General Data Protection Regulation (GDPR), Moi says. “Although the law doesn’t apply in the Swiss territory, it still applies to companies that deal with business outside of Switzerland, which is most companies in Geneva.”
In response, the city will soon launch a data protection programme to help Swiss businesses to comply with the GDPR when managing and using consumer data. Companies will be able to educate their staff on how to work in a more responsible manner. “There are some toolkits for self assessment, for instance,” Moi adds.
Geneva has a longstanding history of financial competence, stability and prosperity. But in the age of cryptocurrency, it sees a new market to be conquered, and a better way of operating. Other cities are now leading the way, creating pressure on Geneva to retain its crown. As Moi says: “We need to catch up”.
Screenshot from presentation by Gianfranco Moi