Two Swiss banks have received licenses from the Swiss Financial Market Supervisory Authority (FINMA) to start offering crypto-allied banking services.
The approved banks—Seba and Sygnum were granted provisional banking and security licenses, which enable them to officially conduct regulated crypto-related services such as deposits, lending, and withdrawals. With the new system, the banks are set to serve asset managers, startups, regular banks, and other financial institutions. While they received the licenses in August, none of the banks has been granted permission to publish its prospectus. The two banks will now be fully licensed within a month.
Helping crypto entrepreneurs
Both Seba and Sygnum will play an important role in assisting startups and traders in the crypto space, who usually miss banking services based on the perception that crypto business is risky. Applauding the move, founder and CEO of Blockchain Propulsion said:
“It’s a great move for Switzerland…to have banks that are specialized in crypto.”
Blockchain Propulsion is a Swiss-based crypto accelerator that helps startups raise capital.
When they receive a full license, the banks will issue, store, manage, and trade digital currencies such as Bitcoin or Ether. They will also offer fiat-to-crypto conversion, brokerage, custody, and tokenization services for crypto assets.
This move by FINMA has catalyzed the interest of other companies such as Bitcoin Swiss, another crypto financial services provider. Switzerland is one of the countries that have been on the forefront in the implementation of Digital Ledger Technology (DLT) and the adoption of tokenized digital assets.
Europe Banking Hubs
In the face of the new development, the banking fraternity in Europe is gearing up to receive the Facebook-allied cryptocurrency Libra, which is due for launch in 2020. However, while European countries such as Germany, Liechtenstein, and Luxembourg are warming up towards DLT, none of the countries has issued a license to a bank to conduct crypto-related services.
Even Malta, the small nation that is known as “Blockchain Island,” has been initiating laws that favor cryptocurrencies, but its startups still find it hard to offer banking services. For this reason, Malta-registered RnF Finance applied for a license from the nation’s financial regulator, towards the end of last year. But according to Ian Gauci, co-founder of Caledo agency in Malta, getting such licenses is hard, terming it “a very robust process.”
These are signs that the EU is imposing stricter regulations regarding crypto assets.