by Matthew Allen
Spanish similar report
The merger of
crypto-currencies and conventional finance
come a step closer to reality.
(© Keystone / Christian Beutler)
The co-founders of Sygnum crypto bank have hailed the award of a
Swiss banking license as a game changer that could open the
floodgates to the integration of crypto-currencies and other digital
assets into the established financial sector.
Sygnum, along with
SEBA, were awarded
provisional banking and securities dealer
licenses by Switzerland's financial regulator on
Both entities will become
fully-fledged banks once they have completed some final routine
"This is the first
time such licenses have been granted worldwide, so Switzerland
is playing a pioneering role," Manuel Krieger, CEO of Sygnum
Switzerland, told swissinfo.ch.
He also thinks the early
movers will encourage others to take the plunge.
"We now have a
responsibility as an enabling platform to help banks and other
financial players make the step into the digital asset world."
"This has positive
implications for Switzerland and distributed ledger technology,
the blockchain-style platform on which crypto-currencies run]
internationally," added Mathias Imbach who runs the group's
"Crypto-currencies will come out of the shadows if dealing with
these assets can be done in a 100% compliant manner upholding
all the rules that a strict regulator demands.
That is a game
changer," he added.
Switzerland has been one of the leading players in the global
adoption of tokenized
digital assets and
For example, Switzerland
is in the process of updating its financial legislation to
incorporate the new technology.
It is one of the
Facebook decided to house its
Libra cryptocurrency foundation
It is also why
established players, such as the
Swiss stock exchange and
state-owned telecoms giant Swisscom, are getting involved, along
with a growing number of start-ups in Switzerland.
Until now, the crypto
asset sector had failed to completely convince the Swiss
Financial Market Supervisory Authority (FINMA)
that it could safely and reliably integrate the worlds of crypto and
Sygnum and SEBA have
now proven this possible to the regulator's satisfaction.
Sygnum has even
created its own digital payment token, backed by Swiss francs,
which can be used to complete trades on its platform.
The benefits of
tokenizing all types of financial assets in a purely digital format
and trading them on
DLT ledgers are believed to be
should make both trading and issuing company shares faster and
cheaper. Instantaneous settlement would also eliminate the risk of
trades going wrong while they wait a few days to complete.
"DLT has potential to
make whole financial infrastructure more stable and robust,"
As with all new
technologies untested on a large scale, there are doubters.
such as bitcoin, have been banned
in some countries as potential instruments for crime and money
laundering. FINMA was clear in awarding the licenses that it expects
crypto banks to abide by anti-money laundering
The United States is leading a host of critical voices against
Libra project, fearing it will
snatch away control of the monetary system.
Institutions like the
Bank for International Settlements (BIS)
highlighted concerns about
Others worry that a "magical" digital book keeping system that does
away with the need for accountants and banks to keep track of the
money sounds too good to be true.
At the very least, say
detractors, it would collapse under the weight of multitudinous
high-speed transactions conducted throughout the world every day.
But despite the doubters, Switzerland appears determined to keep
ahead of the game.
Part of the reason, as
Mathias Imbach lays out, is the fear of falling behind
like Liechtenstein and Luxembourg have also taken
steps towards adopting DLT (although they have not yet licensed
a dedicated crypto bank).
It is crucial for
Switzerland to at least remain at par with them."