In a first for Switzerland's financial center, Vontobel is poised to offer institutional clients crypto depository services, finews.com has learned. The Swiss bank is drawing on a Genevan-based fintech to do so.
Zurich-bank Vontobel is taking a punt at cryptocurrencies: the Swiss bank will offer custodian services for digital assets, a source familiar with the matter told finews.com.
Specifically, banks, fund managers, and crypto asset managers can deposit their coins and other digital assets with Vontobel. The family-controlled firm is about to make digital assets «bankable».
The Missing Bridge
The move is a first for Switzerland, which has avidly courted crypto business. However, Swiss banks so far have refused to build a money bridge between institutional investors which would secure the liquidity that crypto providers have long awaited.
Falcon Private Bank has centered its strategy around cryptocurrencies, but the Abu Dhabi-based wealth manager hasn't yet offered custody services for outside managers.
Banks have successfully smothered the broader investment of crypto products, at least in Switzerland, by bouncing them from fund offerings. This has starved countless crypto providers of access to an established banking structure.
A Global First
Enter Vontobel, which confirmed to finews.com that it will begin marketing crypto custody services on Monday. «As far as I know, Vontobel is the only bank globally to offer itself as a custodian for digital assets,» investment banking boss Roger Studer (pictured below) said.
Banks have until now proffered technology, regulatory, as well as reputational reasons for not cozying up to cryptocurrency business. Vontobel, a prominent issuer of structured products such as warrants, was among the first to issue bitcoin-based certificates.
«We decided two years ago to make the new crypto investment world available to our clients. Our custody offering is a further step in this direction,» Studer said.
Integrated Platfrom From Geneva
Geneva-based startup Taurus is providing a significant piece of equipment for Vontobel's «Digital Asset Vault». Taurus is specialized in crypto-trading and -investments and in particular in the storage of cryptocurrencies.
The startup firm developped a platform that conforms to regulatory requirements and that integrates seemlessly into the existing IT platform of banks. «The cooperation between Taurus and Vontobel is of high importance for the Swiss financial market, because we are linking up two worlds: traditional banking and crypto finance,» said Lamine Brahimi, co-founder and managing partner of Taurus, in an interview with finews.ch.
The Future: «Tokenised Assets»
Vontobel is the first bank to use Taurus' technology and to offer custody service for crypto assets. But the Geneva firm already signed contracts with several other Swiss banks, according to Brahimi (pictured below). That means, Vontobels advantage could evaporate soon.
But for Vontobel, having a deposit bank for cryptocurrencies is but a step along its strategy of presenting itself as a company with a strong focus on digital financial services.
Studer for instance believes that the next step will see the tokenization of traditional investments in equities and bonds, the trading of encrypted traditional financial investment products via Blockchain. «We are also directing our innovation effort towards this area,» he said.
