Is There a Possibility for Swiss Banks to Enter the Crypto Market in the Future?

• Toshendra Kumar Sharma
• December 02, 2019

Multiple joint projects between crypto companies and banks in Switzerland will now provide customers with the opportunity to invest in digital assets and reap the advantages of banking services with respect to cryptocurrencies. It is taking place in a regulated crypto market, as Switzerland has always been friendly towards the growing crypto industry. The latest update is a partnership between a traditional institution and a fintech startup that aims to provide access to major cryptocurrencies to its wealthy clients.

 

Switzerland on the Verge of Becoming the World’s Crypto Bank

 

Though Switzerland has, from time immemorial, established itself as the World’s Bank, has had its image tarnished a bit in the past couple of decades. The Alpine Federation gave up some ground following International pressure, primarily from the European Union and the United States, to reduce the level of banking secrecy and raise taxes to match the rates of those in neighboring jurisdictions. But the cryptocurrencies are currently offering Switzerland a chance to redeem themselves and restore their positions in the banking field. One after the other, Swiss banks are taking this opportunity. The latest entry is the Arab Bank (Switzerland) Ltd., a member of the Jordanian Arab Bank group.

 

The subsidiary is located in Zug, the center of the Swiss Crypto Valley. There are more than 750 crypto businesses that have established their presence in this valley that has already spread to the neighboring cities. The Swiss entity of Arab Bank recently joined forces with Taurus, the blockchain technology firm, to give its customers access to cryptocurrencies. As reported by Swiss Info, the partners plan to launch a range of services related to digital assets. This also includes brokerage and custody of holdings in the two largest coins in terms of market capitalization, Bitcoin Core and Ethereum. These services will be based on the Taurus project storage platform of the crypto company that is designed to provide exchanges, banks, and asset managers with institutional-grade vault services for digital assets.

 

As commented by Serge Robin, CEO of Arab Bank, Switzerland, “We intend to be amongst the first banks to offer digital asset services to our clients in a secure and regulated environment.” He also shared his belief that blockchain technology will certainly disrupt the finance sector. The bank has embarked on this project owing to some remarks from wealthy clients who wanted to add cryptocurrencies to their investment portfolios.

 

Till now, many traditional financial institutions have refrained from offering products that relate to decentralized money, fearing the regulations that make it mandatory to freeze serious amounts of reserve capital.

 

Crypto Startups Become Part of the Solution

 

Young crypto companies are now becoming a part of the equation and provide services to clients of banks that are separated from their main activity. Smaller banks across the globe have shown more willingness to engage in trading cryptocurrencies to reap the benefits of being the first to establish a foothold in this rapidly developing market. Arab Bank is now heading to where other banks have already blazed a trail.

Bank Vantobel also has entered into a partnership agreement with Taurus. They are running a platform together called Digital Asset Value that allows investors to trade and store cryptocurrencies outside their balance sheets. This service is offered to clients who do not wish to deal with the technical aspects of owning coins. Gazprombank (Switzerland) Ltd., the local subsidiary of Russian state-owned giant Gazprombank announced a similar service this year. Its digital asset management product is offered in cooperation with Avaloq and Metaco, the two fintech companies. This product is based on Metaco’s crypto asset custodial solution called Silo. The year 2019 also saw a revival of investor’s interest in digital assets. Julius Baer, the 125-year old private bank and one among the largest financial institutions of Switzerland, revealed its entry into the crypto market through a partnership with crypto banking startup Seba Crypto AG. Recently, Seba Crypto AG and Sygnum AG, another banking solutions provider, were granted banking and securities dealers licenses by the Swiss Financial Market Supervisory Authority.

 

Alternative Sources of Revenue

 

Another bank in Switzerland was also pushed to seek new opportunities in the cryptocurrency market due to the urgent need of finding alternative revenue resources. Last year, it became evident that Maerki Baumann was also interested in providing services to the participants of the industry. There are many banks and fintech entities in Switzerland offering services relating to trading, digital asset storage, and crypto investment. Digital trading platform SwissQuote and Falcon private bank have found partners in the crypto industry for providing clients with custodial solutions and facilitating their participation in crowdfunding by issuing tokens. Crypto banking doesn’t necessarily have to involve traditional financial institutions. A partnership between Bitcoin.com and Cred, the two leading crypto companies, lets customers earn interest on their holdings.

 

Conclusion

 

If you are new to the crypto market domain, you can securely purchase Bitcoin Cash, Bitcoins, and other major cryptocurrencies at some of the popular cryptocurrency platforms such as Bitfinex, Coinbase, Binance, etc. A majority of the leaders of Initial Coin offerings are from Switzerland. This is because of the crypto-friendly legal and regulatory framework of the country and also because of the abundance of technical talent and the wealthy local population.

 

If you are interested to learn more about cryptocurrencies and cryptocurrency certifications, check out Blockchain Council.