Euro to Swiss Franc
Yesterday, I converted 215 euros that had been sitting in a drawer for a long time. Given the ongoing depreciation of the euro, I couldn't afford to delay exchanging them for Swiss francs. The euro has lost nearly half of its value compared to the Swiss franc since its creation and is expected to continue to decline. Fortunately, there are no longer any minimum exchange rate restrictions.
Source: Google Finance
KYC Threshold at €200
I went to the post office to exchange my euros, regardless of the exchange rate. I was very surprised when the postal clerk asked for my ID card and made a photocopy of it. I expressed my surprise and inquired about the reason for this procedure. She told me that it is mandatory for transactions exceeding 200 euros. Since when? Several years ago. The reason for this requirement? That's the law.
I was a bit shocked. Only 200 euros!
In one of the world's most expensive countries, such a sum no longer buys much. In Switzerland, it's the cost of a three-person meal at a restaurant. It is a day's gross wage for a low-income worker.
The additional work involved, as well as the resources and energy expended, must be accounted for, and this has an adverse impact on the exchange rate.
Swiss Legislation
The legislation mentioned by the postal clerk is the federal law aimed at combatting money laundering and the financing of terrorism. Its objective is to ensure that the origin and usage of this small sum are neither illegal nor evading taxation. It's up to compel financial institutions to collect information about their clients and their transactions.
I totally support the purpose of this law. No one should break the law by evading taxes or supporting a terrorist organization. Cryptocurrency is an alternative investment avenue, and its users must adhere to the tax laws of their respective countries. Fortunately, in Switzerland, similar to stocks, cryptocurrency holdings are to be declared as wealth, and transactions are only taxable for professionals.
Threats Of The Law
Data Security
It is imperative to guarantee the security, confidentiality, and integrity of the collected data against criminal, commercial, or political misuse. Platforms like Facebook know as much about us in a few likes as a close friend knows about our preferences, habits, and political leanings. The commercial and political potential of such data is immense.
There will inevitably be data breaches, data loss, or data corruption. Lowering the verification threshold increases the risks related to data security and the number of individuals affected.
Missed Targets
Corporations have elevated tax evasion to an art form, calling it tax optimization. This law has simply made this practice more sophisticated.
While this legislation may deter terrorist organizations, they may need to explore more diversified means of financing, such as being funded to fight in Syria or by the army fleeing while abandoning their weapons.
In the end, the only transactions effectively tracked are those involving small sums by individual taxpayers. Some ordinary people also engage in tax evasion, sometimes unknowingly. While each instance may involve a small sum, when multiplied by the number of small-scale tax evaders, the cumulative amount becomes significant. Every profit, no matter how small, matters.
Classification As Terrorism
One potential issue with this law lies in how the state interprets the definition of terrorism, which can be applied differently over time and for political purposes, to constrain the population or silence opposition. The legality of an action is contingent on the prevailing laws, norms, and societal standards, which can evolve and render the action illegal in the future.
Corruption
Engaging with crypto has shed light on the abundance of money circulation on Earth and raised questions about the state's resemblance to a mafia organization.
COVID has exposed that governments have breached the law and treated citizens as cattle. It has revealed political corruption, ethical lapses among medical professionals and scientists, corporate control over governments breaking any law for profit, and the prevalence of ignorance, obedience, and authoritarianism among individuals.
Freedom
The thresholds for KYC procedures are so low that they encompass everyday transactions, putting personal privacy and freedom of trade at risk.