A Swiss bank to propose Custody and Cryptotrading
Switzerland: A paradise for cryptos
A quick look at banks and crypto
A licence from FINMA
Maerki Baumann, the Swiss private bank, announced on May 29th on its website that its new cryptotrading services and its Custody system will be available this June.
Switzerland: A paradise for cryptos
Switzerland has long been favorable to the crypto industry thanks to a favorable tax environment for the many companies and start-ups in the sector. A banking country par excellence, which is taking the lead in the world of blockchain and cryptocurrency, Switzerland also has very favorable regulations for the purchase of crypto currencies by private fortunes. And it is still determined to play a leading role for innovative companies using cryptos and blockchain technology.
Zug, a small Swiss town of 30,000 inhabitants in the canton of the same name, is the cradle of the Ether, one of the world’s favorite virtual currencies and is even nicknamed the “Crypto Valley”. Zug is currently the leader of Initial Coin Offering (ICO), including the Ethereum Foundation, the NGO that promotes the development of the block of the same name worldwide.
Dozens of start-ups working on virtual currencies and the blockchain have settled in Zug and it is in the foundations established in Zug that the world’s largest fundraising campaigns have been carried out, such as Tezos, which raised 232 million dollars in July 2017, and Bancor, which raised more than 153 million dollars in less than 3 hours last June. As we all know, Facebook did not also randomly choose Geneva Switzerland to register Libra Networks. Switzerland has become a global hub for projects related to cryptography and blockchains.
Then, still being in Switzerland, there is also the city of Zermatt which, thanks to an association between the municipality and Bitcoin Switzerland, has become since the beginning of 2020 the second place in the country, after Zug in 2016, where taxpayers are officially allowed to pay their taxes in Bitcoin (BTC).
A quick look at banks and crypto
Several major banks have already launched themselves into the world of blockchain and cryptocurrency. Projects of banks mixing crypto-currency, blockchain and traditional currencies are coming on the market. More than that, the International Monetary Fund (IMF) made an observation in 2018, that about 15 central banks would, according to a report published by the international organization, be seriously considering creating their own digital currency. We are now in 2020 and we have already had quite a few central banks that have looked at digital currency, such as China’s digital Yuan or France’s e-Euro. For his part, the American JP Morgan has also launched their own digital tokens, the JPM Coin, which one day, according to its CEO, could be used to make everyday payments.
In the case of Maerki Baumann, the bank started to turn to blockchain technology in 2018 in order to improve its prospects. In 2018, it announced that it would manage its customers’ crypto assets. CEO Stephan Zwahlen told swissinfo.ch that “intensive competition and margin erosion” have forced the bank to look for “alternative sources of income. Our ambition is to be the leading private bank in the Swiss crypto sector”.
Moreover, Maerki Baumann is not the only bank in Switzerland that embraces cryptography. Hypothekarbank Lenzburg (Hypi) has also already made an announcement offering the same service in June 2018, and then there are also the private banks Falcon, Vontobel, Julius Bär, Zarattini and Swissquote, which are joining forces with specialists in cryptocurrency to offer trading and asset storage options.
A licence from FINMA
The Zurich-based Swiss private bank Maerki Baumann will launch a crypto-trading office from June and has recently obtained a license from the Swiss Financial Market Supervisory Authority (FINMA) to provide these services. This license allows the bank to trade and store cryptocurrency and other tokens, essentially giving its customers the opportunity to invest directly in duly valued blockchain companies as part of the bank’s support activities. At the initial launch, Maerki Baumann’s customers will be able to trade five major cryptocurrencies, including Bitcoin (BTC), Ether (ETH), XRP, Bitcoin Cash (BCH) and Litecoin (LTC). Traders will also be able to trade other digital assets based on the ERC-20. For the custody system, it uses a multi-layered security architecture designed to provide maximum protection against cyber-attacks and unauthorized access.
Maerki Baumann has appointed Marcel Spalinger as head of the office and the bank intends to expand its services related to the crypto industry to further increase its portfolio. Marcel Spalinger’s team includes private banker Roger Sharma, Milko Hensel, head of digital partnerships, and financial advisor Domenico Ansaldi. Stefan Zwahlen, CEO of the company said:
With digital trading and asset custody, we are not only exploiting a new area of business, but we are also creating additional investment opportunities for our core business. This will benefit younger and technologically savvy client segments, as well as private and institutional clients who wish to seek new sources of return in the digital sphere or further diversify their portfolios. »
In order to manage these new services, Maerki Baumann will collaborate with some of its established partners. Specifically, trading orders placed with the bank will be processed through companies such as the transaction bank InCore Bank AG, professional cryptocurrency brokers and crypto cash exchanges. Maerki Baumann explained: “This will ensure that transactions can be executed quickly and with a narrow trading margin”.
The aim of this initiative is to build a bridge between the traditional private banking and the crypto industry and it will open up new investment opportunities for institutional investors.
Written by: Laetisia Harson
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