Swiss Bank Launches Crypto Custodian Solutions for Institutional Clients

Switzerland is fast making its mark on the cryptocurrency industry. Local bank Vontobel announced Monday the launch of an exclusive custodian service for institutional holdings of cryptocurrencies, reported local agency Finews.

Making Cryptos “Bankable”

Based in Zurich, Vontobel is amongst the first Swiss firms to offer services related to crypto-assets in an otherwise hostile banking climate for the burgeoning asset class. The firm’s move can gain a considerable competitive advantage over rival financial institutions, given the market’s need for a trusted institution to handle large holdings of cryptocurrencies.

A family-owned business, Vontobel is aiming the offering at fund managers, banks, and crypto hedge funds to enable seamless deposits and withdrawal of digital assets. At the time of writing, however, it is unclear the buying and selling of cryptocurrencies on behalf of a client will be facilitated.

As of today, Vontobel’s crypto custody service is fully-operational, and the firm is actively marketing the service to institutions. The bank handles over $23 billion in assets under management and is the world’s only full-service investment agency to launch the cryptocurrency offering.

Meanwhile, Geneva-based Taurus is behind Vontobel’s foray into digital assets. The startup specializes in Over-the-Counter (OTC) sales of cryptocurrencies and provides “institutional-grade” custodian offerings to traditional finance players. The partnership with Vontobel is first in a line of deals to store crypto-assets, as part of a larger storage program called ‘Taurus Protect.’

Taurus co-founder and managing partner Lamine Brahimi spoke of the development:

“The cooperation between Taurus and Vontobel is of high importance for the Swiss financial market, because we are linking up two worlds: traditional banking and crypto finance.”

More Custodian Solutions on the Way?

While Vontobel’s competitive advantage could be a short-lived spell if Taurus onboards more reputed investment banks, the company’s focus on crypto-finance marks a shift away from traditional finance and the oncoming “institutionalization” of virtual currencies.

Switzerland has a booming cryptocurrency and blockchain economy. The country is home to the self-styled “Crypto Valley” of Zug, which has undertaken several blockchain-based trials to govern the local political system and serves as a headquarter to tens of token startups.

But a crypto-to-fiat bridge remains absent in the country, despite its best efforts to attract talent and grow the local economy. While Switzerland has robust regulations in place to govern virtual assets, most banks have stayed on the sidelines citing money laundering and the pseudonymous nature of cryptocurrencies. So far, banks have refused services to cryptocurrency firms, leading companies to seek banking services in neighboring Lithuania and Gibraltar as a result.

Last modified: March 4, 2021 2:30 PM

Shaurya Malwa: Based in Hong Kong, Shaurya finds his true self in the world of decentralized ideologies. When not writing articles for CCN, he spends time building algorithms for his high-frequency cryptocurrency trading strategies.