Published: June 9th, 2020
Swiss Financial Market Supervisory Authority (FINMA), Switzerland’s financial regulator, has licensed two Zurich-based banks to provide cryptocurrency services. The services the two banks have lined up include trading and custody. Subsequently, Maerki Baumann Bank announced that it is launching its trading platform to list cryptocurrencies. Incore Bank, the other licensed institution, will offer various crypto-related services.
Two Swiss banks have received licenses from the country’s supervisory body in charge of financial markets to start providing a range of cryptocurrency-related services. The services include trading and custody of digital currencies.
Maerki Baumann & Co. AG, a private bank and Incore Bank, a business-to-business institution, based in Zurich, have received a go-ahead from FINMA to deal with cryptocurrency-related services. The two banks independently announced the news on Friday, June 5.
The Zurich bank already has a dedicated cryptocurrency counter, and on Friday, June 5, said it had received the necessary licensing to engage in trading and custody of digital assets. Alongside cryptocurrencies, the bank shall also deal with tokens.
With the new license, the bank plans to offer the listed services starting in June 2020. Adding that the dedicated trading counter will support ERC20 tokens, the bank stated that it would commence with five principle assets that are Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Ripple (XRP), and Litecoin (LTC).
Before getting the license, Maerki Baumann & Co. AG has been specializing in business bank accounts for blockchain and cryptocurrency startups. Further, the bank has played supervisory and advisory roles for Security Token Offerings (STOs) and Initial Coin Offerings (ICOs) for clients.
By the end of 2019, the bank was already holding and managing assets worth about CHF 8.5 billion (Approx. $8.8 billion). About 80% of these assets originate from Switzerland, with another 10% coming from Germany, and the remaining from far and wide.
The bank’s announcement served to spell out its short-term plans to expand its traction in the tradable cryptocurrencies space. It also highlighted the bank’s intentions to offer cryptocurrency investment services in Q3 of 2020 going forward.
The bank’s notice reads in part that digital assets will indeed become fixed elements of any future professional asset management and investment advisory services. Therefore, the bank’s action puts it in the driver’s set in setting the tone for the future of investment advisory.
Incore Bank, a Zurich-headquartered institution specializing in outsourcing services for financial services providers such as custody, settlement, accounting, compliance, payments, and tax support, will add cryptocurrency holding to the list of services it offers.
The bank counts Maerki Baumann & Co. AG among its clients and will henceforth trade, transfer, hold, and generate digital assets, according to the Friday, June 5 announcement. The notice goes on to state that Incore Bank is the first Swiss institution of its kind to offer banks and other financial service providers with easy and secure worldwide access to a novel and future-leaning asset class.
While preparing to plunge deep into the blockchain sphere, Incore Bank recently launched a digital services department that will offer various services ranging from distribution, brokerage, insurance, and storage of cryptocurrency and digital assets.
The bank’s head of digital services, Daniel Blatter, said that his institution guarantees the full separation of crypto assets held on individual wallets. He added that this additional service would not require further capital investment from the client bank.
To ensure that the bank succeeds in providing quality services, it announced that is has partnered with respected companies that have an interest in the blockchain and cryptocurrency space such as Crypto Finance AG.
The CEO of Crypto Finance AG said that it would not be long before Bitcoin becomes a standard portfolio of any standard bank. He added that since Incore Bank took the first leap and has a consistent approach of trailblazing the cryptocurrency the environment, his institution can now customize its custody and brokerage infrastructure to help Incore Bank meet the needs of its customers.
Incore Bank has partnered with an independent crypto consultancy firm Inacta AG to expand its custody, brokerage, and transfer services to cover security tokens. Besides, it will create more services in the field of tokenized assets.
These announcements are not new in the Swiss financial services sector. Cryptocurrencies and banking have had a considerably long relationship in the alpine country. Institutions such as SEBA Bank AG have provided cryptocurrency-related services for some time now.
Swiss bank customers are not new to cryptocurrency-connected debit cards. Some banks that have such services provide automated crypto-fiat conversion via their debit cards. These banks offer products that allow customers to shop regularly using crypto, and undertake cryptocurrency options trading using the banks’ mobile apps.
In October 2019, the Swiss National Bank, the country’s central bank, announced its partnership with SIX, a financial services company, to explore the use of digital currencies in trading.
The relationship between Swiss financial service institutions and cryptocurrencies is so tight that the sector took the Goldman Sachs Group, Inc.’s critique of Bitcoin rather personally. Chris Thomas, the head of digital assets at Swissquote Group Holding SA, a Swiss bank specializing in online trading and financial services, said that Goldman Sachs’s assessment of Bitcoin was one-sided, adding that the opinion was a disservice to cryptocurrency enthusiasts.
According to Thomas, Bitcoin, and a few other cryptocurrencies define the paradigm shift in the global financial market and commercial space.
Switzerland recently licensed two private banks to provide a range of cryptocurrency-related services. The two, Incore Bank and Maerki Baumann & Co. AG will offer, among other things, cryptocurrency trading and holding. The step affirms Switzerland’s commitment to embrace cryptocurrencies and integrate it into the mainstream banking sector. The action directly contradicts Goldman Sachs’ opinion. The giant investment bank recently advised against investing in Bitcoin or considering it as an asset class.