Swiss banks shed fear of bitcoin

A growing number of Swiss banks are rising above scepticism of cryptocurrencies. Keystone

More than a quarter of Swiss banks are offering clients access to cryptocurrency investments, or have plans to set up such services, despite high levels of global scepticism towards this investment option.

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Most banks rely on third-party companies to provide technical support for these services, according to a study published on Tuesday by Lucerne University of Applied Sciences and Arts (HSLU).

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The price of cryptocurrencies has risen significantly again in recent months. More banks with private customers are shedding their reticence and want to jump on the bandwagon. The HSLU study shows that 28% of Swiss banks currently offer their customers the opportunity to invest in cryptocurrencies or will do so in future.

State-backed banks are showing a particular appetite for adding crypto services to their offerings. The cantonal banks of Zug, St Gallen and Lucerne and Postfinance, the banking arm of the Swiss Post Office, have recently launched their crypto offers. The online bank Swissquote and the regional bank Valiant have been courting crypto customers for some time, and four other institutions have plans in the pipeline.

Restricted services

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“Banks seem to see potential in crypto investments,” states study author Felix Buschor. The focus is no longer just on wealthy customers, but increasingly also on a general clientele. Banks are viewed as more trustworthy than crypto exchanges and can complimentary banking services.

However, the range of products on offer is currently still limited. For example, banks often only offer trading and custody services for the biggest cryptocurrencies, such as bitcoin and ether. In addition, the direct transfer of these currencies or so-called ‘staking’ services are usually not offered by retail banks.

According to the study, setting up a crypto offering is expensive and the technical hurdles are high. Institutions often prefer to procure the services of third-party providers. “This is much quicker than setting up your own processes,” says Buschor.

Speculative investment

However, some of the institutions surveyed were also prepared to invest substantially in the development of expertise, systems and processes relating to blockchain. This is accompanied by the conviction that the technology will help shape the future of the banking business.

Overall the study also shows that scepticism in the banking world towards cryptocurrencies remains high: a good two thirds of the banks surveyed do not have a cryptocurrency offering and are not planning to introduce one. This is due to the speculative nature of investments in cryptocurrencies as well as the legal and regulatory risks.

Translated from German by DeepL/mga

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