Swiss Crypto Market Secures Banking Access: Massive Growth Ahead?
Swiss crypto firms have finally gained access to basic banking services. Will the industry begin to see massive growth? | Source: Shutterstock
Guido Buehler, a former UBS executive and the CEO of Seba, the first bank in Switzerland offering both traditional banking and crypto services, has said the crypto community of Switzerland would gain access to stable banking services.
According to Buehler, even for a company like Seba founded by a group of high-profile former bank executives, it was extremely difficult to obtain a banking partner.
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For an average cryptocurrency startup, it is highly challenging to secure a financial institution to clear payments in the region, a factor that may have slowed down the growth rate of the Swiss cryptocurrency sector.
Switzerland’s Crypto Market to See Drastic Changes
Seba, which raised $103 million in October 2018, recently partnered with Julius Baer, one of the largest private banks in Switzerland to provide the bank’s clients with access to crypto.
As a regulated bank with the presence of major financial institutions like Julius Baer as the company’s investors, Seba will provide banking services to cryptocurrency startups and companies in Switzerland, allowing firms to operate seamlessly without barriers in financial services.
The CEO said:
“We will provide custody storage and we will provide transaction banking services and us, as Seba, as a company, a Swiss company with Swiss money and with Swiss founders, we had a very hard time to find a bank that opens account for us just for the foundation.”
“We know it first hand how challenging it is [to open bank accounts in Switzerland for crypto companies] and Switzerland has declared, in the beginning of this year, that it wants to be one of the crypto nations of the world in 5 years, but how can you be that nation if you don’t offer those services to the crypto community.”
For the first time, the cryptocurrency sector of Switzerland will face no hurdles in creating bank accounts to carry out key business operations which could further fuel the local cryptocurrency market.
Previously, Heinz Taennler, Finance Director in Zug, warned the government that the reluctance of banks to provide cryptocurrency businesses access to banking services had led businesses to migrate to other regions like Liechtenstein.
“All their banking relationships are going to Liechtenstein. These are hundreds of jobs that have been created, and every job is important,” Taennler said .
The government of Switzerland has already expressed its intent to facilitate the growth of blockchain technology and the country’s digital asset sector.
Rapid Institutional Bitcoin Adoption
Buehler stated that the company had seen high net worth individuals keen on cryptocurrencies like Bitcoin because of their ability to preserve wealth and the representation of new technology.
He said:
“Ultra high net worth individuals, they are very interested for two reasons: one is the technical aspect of it so it’s blockchain and crypto and the new basis model that will emerge out of it but the second one is about wealth preservation.”
“Bitcoin can be considered as a very stable store of value.”
For years, analysts have predicted institutional and accredited investors would move into the cryptocurrency market and trigger a large inflow of new capital.
However, the first batch of public pension funds invested in a crypto fund operated by Morgan Creek Capital earlier this month and the majority of institutions remain cautious in committing to the asset class.
The demand for crypto as a means to preserve and protect wealth has consistently increased over the years as seen in the growing popularity of businesses like Xapo, Coinbase, and Digital Currency Group’s Grayscale, all of which operate services that target institutions and high net worth individuals.
With the entrance of some of the world’s biggest financial institutions in the likes of Julius Baer, Fidelity, ICE, and Nasdaq, more institutions are expected to commit to the cryptocurrency sector in the near-term.
Featured Image from Shutterstock
