One of Switzerland’s largest and oldest banks has entered into a partnership with a crypto startup to offer its clients a range of digital asset services.
Julius Baer, a multinational private bank based in Zürich will collaborate with banking newcomer, SEBA. A pioneer in the banking world, SEBA sees its mission as providing a progressive technological bridge between the traditional and crypto banking worlds. The Julius Baer Group has assets in the region of CHF254 billion (€223 billion) under management, employing over 5,000 people.
The Swiss banking behemoth made the announcement on its website on Tuesday. SEBA is in existence for a little over a year and counts Julius Baer as one of its early phase investors, with the larger bank having taken a minority stake in the business in 2018.
SEBA applied for a banking license in 2018 and expects its crypto-bank to go live in Q2 2019. According to the press release, the partnership will take effect from the point at which SEBA is granted a banking license by the Swiss Financial Market Supervisory Authority (FINMA).
SEBA CEO: Bitcoin can be considered a very stable store of value
The CEO of SEBA, Guido Buehler explained why crypto-assets are of interest to high net worth individuals in an interview with CNN Money:
“Ultra high net worth individuals are very interested for two reasons. One is the technical aspect of it, so it’s blockchain and crypto and the new business model that will emerge out of it. But the second one is also about wealth preservation.” . . . “Bitcoin can be considered as a very stable store of value.”
Buehler confirmed that the bank will provide custody and storage – together with transaction banking services. The CNN Money anchor put it to Buehler that crypto startups have had ongoing difficulties in trying to maintain banking services with conventional banks. Buehler confirmed that SEBA experienced the very same difficulty itself an that it will be enabling precisely these startups, facilitating their banking requirements.
“Switzerland has declared the beginning of this year that it wants to be one of the crypto nations of the world in five years but how can you be that nation if you don’t offer those services to the wider crypto community?”.
Peter Gerlach, Head of Markets at Julius Baer said that the bank was “convinced that digital assets will become a legitimate sustainable asset class of an investor’s portfolio”. In its own separate press release, SEBA confirmed that it will propose Gerlach to the board of directors at an extra-ordinary general meeting of the company which is scheduled for 20 March 2019.
Switzerland’s ‘Crypto Valley’
Glenn Barber, Chief Institutional Officer with New York-based crypto-asset broker, Voyager, took to Twitter to welcome the move towards digital assets.
One of the biggest Swiss private banks, Julius Baer, is getting into crypto.
Their partner, SEBA, is trying to become a regulated cryptocurrency bank in Switzerland.
— Glenn Barber (@glennjbarber1) February 26, 2019
However, he also expresses the view that the Swiss are stealing a march on the U.S. in this respect.
The Swiss are rarely to be found wanting when it comes to nurturing financial services. The landlocked nation has a long banking history. With regard to cryptocurrency and blockchain technology, it is once again at the forefront.
The country has developed a thriving ‘crypto valley’ centred around the town of Zug on the shores of the alpine lake of the same name. With a decentralised Swiss political system and low tax business environment, the region has been successful in attracting numerous crypto and blockchain startups. In spite of the decentralised nature of cryptocurrency, the development of the industry has resulted in hubs emerging in centres such as Silicon Valley, Gibraltar, Malta and Zug.
The region welcomed in crypto startups in 2014 at a time when governments and regulators worldwide were closed-minded in their approach to crypto an blockchain. That policy of early adoption is reflected once again with the further development of SEBA today as it positions itself to be one of the worlds first fully regulated crypto-banks.