Julius Baer, one of the biggest private banks in Switzerland, is going to offer its clients access to a range of digital asset services, including cryptocurrencies. The announcement came on 26 February after the release of a statement announcing that Julius Bear was partnering with crypto bank startup SEBA Crypto. SEBA Crypto AG (SEBA), which focuses exclusively on cryptocurrencies, raised over $103 million in September last year. Julius Bear has also been a minority shareholder of SEBA since last year. The news is not surprising as Switzerland is one of the leading nations in the adoption of cryptocurrencies, alongside Japan, the US, South Korea, Malta and Singapore.
Switzerland giving more exposure to cryptocurrencies
As we have seen in previous blog posts, many established institutions and financial services firms are embracing cryptocurrencies. From JP Morgan’s JPM Coin to Fidelity, Nasdaq, and ICE many respected brands are supporting cryptocurrencies and, by doing so, they are helping to solidify their presence in the financial system. Julius Baer’s entrance into the crypto market adds to the ongoing growth of the crypto market and cryptopayment solutions. This proves that there is still a long way to go and that the “nascent” market we referred to in the last article with Reddit’s Ohanian is slowly and steadily becoming stronger.
Peter Gerlach, Head of Markets at Julius Baer bank, said: “At Julius Baer, we are convinced that digital assets will become a legitimate sustainable asset class of an investor’s portfolio. The investment into SEBA as well as our strong partnership are proof of Julius Baer’s engagement in the area of digital assets and our dedication to make pioneering innovation available to the benefit of our clients.”
SEBA Crypto is aiming to become a bank offering cryptocurrency-related services and it has signed an agreement with Swiss mortgage bank Hypothekarbank Lenzburg AG to use Finstar, its core banking system.
In Switzerland, things are changing as the main stock exchange SIX Swiss Exchange will test blockchain integration for its digital trading platform that will be released later this year.
Other Swiss private banks have opened the way for Julius Baer: In August 2017, Maerki Baumann Private Bank announced that it would be accepting cryptocurrencies. Falcon bank facilitates direct crypto transfers and investments in Bitcoin, Bitcoin Cash, Ether, and Litecoin using its own blockchain.
License to bridge fiat and cryptos
As the Bitcoinist reported, SEBA wants “to build a FINMA supervised and progressive technological bridge between the traditional and the crypto worlds.” FINMA is the Swiss Financial Market Supervisory Authority and, when SEBA succeeds in getting a banking and a securities dealer license, then its partnership with Julius Baer will take effect. SEBA CEO Guido Buehler said: “We are very proud to have Julius Baer as an investor. SEBA will enable easy and safe access to the crypto world in a fully regulated environment. The cooperation between SEBA and Julius Baer will undoubtedly create value for the mutual benefit and to the clients.”
As it is expected, Julius Bear and SEBA’s deal will help increase the trust in cryptocurrencies. SEBA chairman Andreas Amschwand had said in the past: “In Switzerland we have commitment from various authorities to establish a comprehensive regulatory environment for the development of blockchain technology and the sustainable, stable growth of crypto assets.”
Julius Baer’s integration of cryptocurrency services will further strengthen trust in cryptos, legitimize their use in everyday payments, and open the way for more financial institutions to do the same. Participation in the cryptocurrency market is increasing and the more leading financial firms commit to their adoption, the more widespread their use will become. This will inevitably boost PumaPay’s solution as its developing its own cryptopayment solution and building a network of strong businesses which will adopt its protocol.