Crypto banking firm SEBA has teamed up with Julius Baer, a leading Swiss private bank, to offer traditional banking services to Switzerland’s blockchain industry.
It seems as if the banking sector is finally waking up. Last week, we reported that Initium Group is seeking licenses in Liechtenstein and Switzerland to offer blockchain-specific banking services. Now Julius Baer, Switzerland’s third-largest banking group, is joining the ranks of crypto supporters.
The bank has announced a partnership with Switzerland-based SEBA Crypto AG to offer banking services to blockchain businesses. The partnership will eventually enable Julius Baer’s clients to store, trade and invest in digital assets.
Switzerland’s crypto banking services still underdeveloped
Despite the growing size of the Crypto Valley, blockchain banking in Switzerland remains a major challenge. “It is true that the Swiss banks have fallen behind,” says André Wolke, CEO and co-founder of the Zug-based blockchain company Validity Labs. Bernd Lapp of Swarm City adds, “It is as if Swiss financial institutions want to prevent crypto companies from flourishing here.”
Heinz Taennler, Finance Director in Zug, said the reluctance of banks to provide cryptocurrency businesses access to banking services had led businesses to migrate to Liechtenstein. “All their banking relationships are going to Liechtenstein,” says Taennler. “These are hundreds of jobs that have been created, and every job is important.”
Daniel Haudenschild, president of the Crypto Valley Association, blames the government for not creating suitable regulations. While countries like Liechtenstein are moving ahead with crypto-friendly regulations, Haudenschild thinks Switzerland lacks behind.
Guido Buehler, CEO of SEBA and former UBS executive, says even for his company which was founded by a group of former high-profile bank executives, it was difficult to obtain a banking partner. “We know first-hand how challenging it is,” says Buehler. If Switzerland wants to stay competitive in the digital economy, that will have to change.
SEBA plans to offer full range of traditional banking services
SEBA aspires to be a crypto banking pioneer, offering traditional banking services to blockchain businesses. The company was founded by veteran banking experts and is currently in the pre-application process for a banking license. The “Crypto Bank” is planned to go live in Q2 2019.
The company has already raised $103 million in October 2018. As a regulated bank with high-caliber banking partners like Julius Baer, SEBA could make a major difference in crypto banking.
The firm plans to offer the full range of transaction banking and custody services, including secure storage and investment protection, trading between crypto and traditional currencies, wealth management products and services, management of cryptocurrency market and liquidity risks, professional ICO advisory and other crypto corporate finance services. The partnership with Julius Baer will come into effect as soon as SEBA has obtained its banking license.
Julius Baer is among SEBA’s investors and believes in the value proposition. Peter Gerlach, Head of the Markets Department at Julius Baer, said the bank will manage to turn digital assets into a legally operational asset class and attract investors. He believes SEBA could become the first bank to succeed in this field.
It’s about time that the Swiss banking sector steps up their game. “Switzerland has declared, at the beginning of this year, that it wants to be one of the crypto nations of the world in five years,” says Buehler. “But how can you be that nation if you don’t offer those services to the crypto community?”