Swiss Banks Are Embracing Cryptocurrencies Study Finds

Swiss Banks Are Embracing Cryptocurrencies Study Finds

Tue, May 28th 2024

More Swiss banks are offering cryptocurrency investments, though many remain cautious due to technical and regulatory challenges.

KEYSTONE/Alexandra Wey

More banks in Switzerland are treating cryptocurrencies as a fully-fledged asset class. Most institutions rely on third-party providers, as revealed by a Lucerne University of Applied Sciences and Arts (HSLU) study published on Tuesday. However, skepticism towards crypto investments remains widespread.

Cryptocurrency prices have risen significantly recently. More banks with private customers are shedding their reticence and joining the trend. According to HSLU, 28% of Swiss banks currently offer or plan to offer cryptocurrency investment opportunities.

Interest has notably increased among various state institutions. For instance, the cantonal banks of Zug, St. Gallen, and Lucerne, as well as Postfinance, have introduced related services. The online bank Swissquote and the regional bank Valiant have been courting crypto customers for some time, with four other institutions planning to follow suit.

“The banks seem to see potential in crypto investments,” says study author Felix Buschor. The focus is expanding from just wealthy customers to the general clientele. Banks hold a trust advantage over crypto exchanges, and these offerings can integrate with other banking services.

The product range is still limited. Most banks offer trading and custody services only for top currencies like Bitcoin and Ether. Direct transfers or “staking” services are generally unavailable from retail banks.

Setting up a crypto offering is costly and technically challenging. As a result, many institutions opt to use third-party providers rather than develop in-house systems. “This is much quicker than setting up your own processes,” says Buschor.

Despite some willingness to invest in blockchain-related expertise and systems, skepticism remains high. Around two-thirds of surveyed banks do not offer and do not plan to offer cryptocurrency services. The speculative nature of crypto investments and the legal and regulatory risks contribute to this caution.

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