Switzerland has been on a mission to gain the cryptocurrency crown and become the crypto capital of the world. Several countries have been on the trail to take advantage of the crypto-boom, Switzerland is looking to gain back supremacy, which is affirmed by private Swiss bank, Maerki Baumann, forming banking agreement with cryptocurrency firms to operate with them and provide crypto services. The first bank to start accepting crypto assets was Falcon Private Bank. This move by the to major private Swiss banks is drawn from greater demand from the public who have had to invest and trade their crypto currencies in other places before, which is now aimed to be exploited by these banks and they have hence, responded to the new demands. Based in Zurich, Maerki Baumann specialize in asset management and have been family-run for 80 years, with an estimated management of over 7 billion Swiss francs.
Despite of the high popularity of cryptocurrency in the country, most banks in the country refuse to accept money traded via crypto assets which is held by many in Switzerland. This refusal is mainly down to the fact that the money traded via digital assets cannot be tracked and could be tainted or a part of some laundering activity. Maerki Baumann also do not offer direct investment in cryptocurrencies, however they do provide experts to their clients, if need be. In a statement they’ve informed:
MBC does not offer direct investments, but we are happy to make information available on certificates from renowned issuers in this area. Maerki Baumann does not issue recommendations regarding the quality of crypto exchanges and/or custody solutions (wallets), but we would be happy to provide interested clients with contact details for specialists in the area of blockchain technology and cryptocurrencies.
MBC further claim to have been ‘keeping an eye’ on this particular space:
Maerki Baumann is keeping an eye on the development of these investment instruments and the corresponding progress on the regulatory side, without looking to gain exposure to this young asset class at the present time. This is true not just of direct investments in cryptocurrencies, but also investments in the necessary technology for the trading and custody of these instruments.
The bank also admitted in a statement that they did not currently possess adequate repertoire to adopt crypto trading and investment, but they would be keen to keep their options open regarding the outlook.
We currently see cryptocurrencies as alternative investment vehicles, but we have limited experience and data (prices, volatility, trading volumes) available in our house,
The crypto-valley, Switzerland
It is rather intriguing to realize, that a booming economy of the world such as Switzerland, that is closely tied to it’s rather high flying Franc, is still enticed by the volatile digital currencies. Four of the 10 biggest initial coin offerings last year were in Switzerland, more than any other country. Switzerland has a well maintained repute in becoming a global hub for cryptocurrencies and blockchain projects. The SIX Group – the parent company of Maerki Baumann, announced last July that it will establish a fully integrated digital asset infrastructure, known as the ‘Swiss Digital Exchange’. This pragmatic venture is set to open it’s doors in 2019 under the financial regulators of the country.
Often dubbed as the Silicon Valley equivalent, a ‘Crypto-Valley’ is on the loom, in Switzerland. It’s elite banking prowess, booming economy, low taxes and elite universities could always help it make the home of cryptocurrencies. Mr. Worrall, from MyBit headquarters said:
Switzerland “is the best from a tax, legal and operational standpoint,”
Persistent crypto problems
Despite of the positive note, Baumann’s comes as a bold move. Swiss regulators had expressed great concern at a large exodus of crypto companies from ‘crypto valley’ coinciding with the closure of two small banks that had been open to establishing business with companies and individuals who had assets related to crypto related activities. Following the closure of these banks, industry businesses had faced difficulties finding willing banking partners, highlighting an issue that has long plagued crypto companies in many other regions. This prudentness is echoed by Maerki’s advice in digital investing in their report:
We would advise against any major investment in cryptocurrencies at present. In our view, cryptocurrencies are unsuitable for long-term investors due to the uncertainties set out above. Only investors who are aware of all the risks associated with these investment instruments should consider allocating a limited proportion of their disposable assets to this asset class.
Second and not the least
Maerki Baumann’s decision to begin working with crypto industry firms could help stem the tide of such businesses leaving Switzerland, enabling the country to remain an important hub for cryptocurrency and blockchain development which keeps them at a knife’s edge with other major stakeholders in the crypto demographic. Malta and Switzerland are leading the way inside Europe, Germany are also taking big steps forward, and possibly the biggest news in recent times is that of “Bakkt”, the exchange being launched by the International Exchange – the owner of the New York Stock Exchange. It is certainly a small step towards something big, which is being spearheaded by Switzerland. Maerki Baumann’s decisiveness coupled with a radical approach towards crypto is just the kind of patience that is required for this space to pan out in a systematic way. The second bank to offer crypto services might not be the last one, there in ‘Crypto Valley’ Switzerland.