Swiss Bank UBS Plans Cryptocurrency Offerings to High Networth Clients

Swiss Bank UBS Plans Cryptocurrency Offerings to High Networth Clients

Leading Swiss investment bank UBS Group AG is considering adding cryptocurrency offerings to its services.

UBS Group To Offer Cryptocurrency Services

According to Bloomberg, UBS is exploring various alternatives to offer its wealthy clients exposure to cryptocurrencies like Bitcoin.

Anonymous sources familiar with the plan told Bloomberg that UBS would only invest a small percentage of their client’s wealth in cryptos due to their volatile nature of the sector. One of the means being considered includes investing through third-party investment vehicles.

UBS is a Swiss multinational bank founded over 170 years ago at the advent of the Swiss banking industry. It’s known as a billionaire’s bank that manages a large amount of private wealth globally. The firm counts around 50% of the world’s billionaires as its clients.

Banking Giants Considering Offering Crypto Services

Several banking giants seem to have warmed up to offering cryptocurrency trading and custody services following Bitcoin’s terrific rise this year.

The news of UBS comes after banking firm Citigroup revealed it was mulling the idea of floating a crypto trading, custody, and financing service.

The global head of foreign exchange at Citi, Itay Tuchman, revealed Citigroup’s interest in crypto when he spoke about how the bank had seen a high surge of interest in Bitcoin from large clients since last August. Tuchman, however, said the firm is in no rush to launch crypto services.

Many other investment banks are pushing towards cryptocurrencies. Earlier this year, Goldman Sachs relaunched its cryptocurrency trading desk after a three-year hiatus, with new plans to once again support Bitcoin futures trading.

Morgan Stanley also became the first major US bank to offer its wealth management clients access to Bitcoin funds. The bank announced that it would launch access to three funds allowing Bitcoin ownership.

Sources have also revealed that JPMorgan Chase & Co is preparing to let private wealth clients invest in a managed Bitcoin fund for the first time.

BNY Mellon Corp also joined the crypto train when it disclosed its intention to form a new unit to help clients hold, transfer and issue digital assets in February.

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Author: Jimmy Aki

Zurich-based Crypto Broker AG Receives Securities License from FINMA

Crypto Broker AG has obtained a securities house license from Swiss financial regulator, the Swiss Financial Market Supervisory Authority (FINMA) that will allow the company to offer services to institutional investors — “a significant milestone (that) caps a successful previous year,” the broker said in a statement Monday.

The firm is based in Switzerland, which has crypto favorable regulations, while major banks still stayed largely away from offering blockchain-based services.

Moreover, the securities license has been granted to a handful of companies that includes Sygnum and SEBA. Calling this a “pivotal moment,” Jan Brzezek, founder and CEO of the Crypto Finance Group, said, with this license,

“We will be able to offer our professional – and regulated – services to even more financial institutions, enabling them to enter this new asset class.”

Receiving the license means the broker can now hold funds on behalf of its clients as well, a feature which is “highly relevant for institutional clients, as many do not have their own capability.”

AG’s clients traded more than $1 billion in assets last year, with its digital operations growing “exponentially.” The company expects to further expand its business in 2021.

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Author: AnTy

Sweden Is Working with Corda’s DLT for the e-Krona CBDC Proof-of-Concept

Sweden Is Working with Corda’s DLT for the e-Krona CBDC Proof-of-Concept

The Swiss central bank is already working with Corda’s Distributed Ledger Technology (DLT) for its CBDC proof-of-concept in the proposed e-krona digital currency. Cecilia Skingsley, the bank’s deputy governor, confirmed this development while speaking yesterday at the CFC St. Moritz conference panel. Sweden had recently announced the commencement of e-krona’s exploratory phase.

According to Skingsley, Corda was recommended by Accenture, which began working with Riksbank as early as 2019 on the possibilities of a CBDC. This DLT provider was apparently selected because of its current fit with e-krona’s proposed criteria. Skingsley emphasized that,

“The reason we use Corda is not that we necessarily think that Corda is the best and optimal choice for an eventual future e-krona, but when we did our procurement process, the proposal from Accenture based on Corda we found was the one that fitted our criteria the best.”

With the exploratory phase kicking off, Sweden’s population, which is used to cashless money, could soon witness a transition to digital monetary policy as well. The country has been actively involved in CBDC research and development, ranking among the frontrunners in this space. Nonetheless, Skingsley noted that the developments are but an exploration into the CBDC ecosystem,

“Although we are exploring this issue, the Riksbank has not decided to issue an e-krona. We are still in the phase when we are investigating different options.”

Other prominent jurisdictions like the U.S and France have also started the year with a keen interest in the value proposition in CBDCs. The Fed Reserve Chairman Jerome Powell recently mentioned in an interview that CBDCs are of high priority in the combat against ‘bad private money.’ Meanwhile, China has continued with the digital yuan pilot, having rolled out ATMs in the Shenzhen region.

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Author: Edwin Munyui

Swiss Stock Exchange, SIX, Adds A New Bitcoin ETP (BTCE) From Issuer ETC Group

SIX Swiss Exchange, one of the leading marketplaces for crypto products, has welcomed a new Bitcoin exchange-traded product (ETP) provider known as the ETC Group. According to the official announcement, ETC Group will join 5 other ETP providers, scaling the number of listed ETP’s to 34.

The new Bitcoin ETP goes by the ticker ‘BTCE’ and tracking Bitcoin’s price BTC 6.28% Bitcoin / USD BTCUSD $ 38,620.37
$2,425.366.28%
Volume 63.56 b Change $2,425.36 Open $38,620.37 Circulating 18.6 m Market Cap 718.36 b
6 s Swiss Stock Exchange, SIX, Adds A New Bitcoin ETP (BTCE) From Issuer ETC Group 11 min New Zealand’s Financial Markets Authority Warns Crypto Investors to Watch Out for Scams 44 min Howard Marks Warms Up to Bitcoin; His Son Holds A ‘Meaningful Amount’ of BTC For The Family
to inform its performance. Basically, this crypto-oriented product gives exposure to Bitcoin while operating under the regulated SIX exchange marketplace. The ETP is available in GBP, CHF, and USD trading pairs.

Given that the ETP tracks Bitcoin, ETC Group has 100% physically backed the BTCE ETP; in simple terms, the Group owns Bitcoin as the underlying asset to this particular crypto product. Investors can, therefore, participate in the crypto markets by tracking the price of BTC, which is reflective of the ETP performance.

SIX Swiss Exchange head of markets, Christian Reuss, said the milestone would further expose investors to more crypto products,

“We welcome ETC Group to the family of ETP providers offering their products at SIX. With the new product, investors gain access to 100 different crypto products trading on our platform and with this have even more opportunities to diversify their portfolio.”

The exchange also reported that it broke the billion-dollar barrier in crypto products trading turnover to CHF 1 billion in 2020. This figure has increased by over 100% compared to 2017’s turnover, around CHF 525 million; crypto-related trades broke previous records to hit 48,024.

Meanwhile, ETC Group who is the provider of the newly listed Bitcoin ETP, has experience in the innovation of digital asset-backed securities; the firm enjoys backing from heavyweight London-based institutions such as XTX Ventures and ITI Capital.

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Author: Edwin Munyui

BIS Wholesale CBDC Proof-of-Concept in Collaboration with SNB and SIX was A Success

The Bank of International Settlements (BIS), Swiss National Bank (SNB), and SIX Digital Exchange has completed a wholesale CBDC proof-of-concept (PoC), which tested the integration of a CBDC with tokenized assets and the feasibility of linking existing payment networks with Digital Ledgers (DLTs).

As earlier reported by BEG, the SNB and BIS were planning to launch a PoC CBDC by the end of 2020; it seems the duo is on track given the latest updates. Dubbed project ‘Helvetia,’ this initiative tested the technical and legal feasibility of integrating digital assets via a CBDC or linking current networks with DLT ecosystems. The press release reads,

“Project Helvetia shows the feasibility of two proofs of concept (PoCs), using “near-live’ systems to settle digital assets on a distributed ledger with central bank money … The collaboration sets the stage for further joint experimentation to assess the impact of digital innovation on the future of the financial system.”

Switzerland, which has long been an international financial hub, is looking to capitalize on the benefits of DLTs to further increase its attractiveness as a haven. SNB’s governing board member, Andréa M Maechler, noted that the SNB is prepared to embrace DLT if this means a better financial ecosystem,

“Irrespective of which technologies the financial markets adopt next, the safety and reliability of Swiss financial infrastructure must be preserved. If DLT can deliver significant improvements in securities trading and settlement, then the SNB will be prepared.”

Pros and Cons for both PoCs

Following the PoC tests, this initiative revealed that both a wholesale CBDC or linking existing payments with DLTs come with pros and cons. The former provides a seamless avenue for settling digital assets but is likely to raise significant governance and policy challenges. As for the integration approach, policy implications are minimal, although stakeholders would have to forego the perks of fully integrating with DLT networks.

Nonetheless, this milestone set the stage for further practical CBDC research according to the head of BIS Innovation Hub (BISIH), Benoît Cœuré,

“If wholesale CBDCs are to fulfill their potential as a new means of settlement, their design and implications deserve close study and consideration. This is only possible via continued deliberations and experimentations among central banks and with other stakeholders, such as market supervisors and the private sector.”

The press release was keen to point out that this innovation is only a PoC test and should be interpreted that the SNB will issue a wholesale CBDC or facilitate exchange clearing through DLT. Meanwhile, other jurisdictions, including Canada, have recently signaled a keener interest in the CBDC developments to hedge for a virtual monetary future.

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Author: Edwin Munyui

Web3 Foundation Awards Grant to Swisscom Blockchain To Secure Polkadot PoS Network

Swisscom Blockchain, the blockchain tech arm of Swiss telco giant, Swisscom, received a grant from Web 3 Foundation to build guard operators for Polkadot’s and Kusama’s nodes and validators.

In a blog post released on Wednesday, Swisscom Blockchain’s Kubernetes Operator will enhance the robustness of both chains making them, “less prone to attacks on network participants.” This aims to strengthen the trustworthiness of network participants on the blockchain platforms.

According to the statement released, the Kubernetes Operator aims at protecting network participants on a proof-of-stake (PoS) blockchain, Polkadot and Kusama, in case the network goes down or is compromised.

PoS consensus mechanism introduces a concept of slashing, which happens when a node validator does not function correctly or tries to cheat the system. For example, if a node operator modifies the system updates without community approval, they are at risk of getting ‘slashed’ – lose all their staked coins.

This brings about a challenging prospect to PoS blockchains hence the need for Kubernetes Operator to monitor the availability and behavior of these node operators.

The operator is a set of tools that enable the deployment and monitoring of node validators and network participants for high availability; Swisscom Blockchain AG makes it easier for network validators on Polkadot and Kusama to interact easily with public Blockchain networks through a network of “highly secured sentry nodes.”

Swisscom Blockchain received an undisclosed Wave 5 grant from the Web 3 Foundation through the General Grants Program. According to Jorge Alvarado Flores, Head of Technology at Swisscom Blockchain, the grant will allow the telco to set up, “an open-source repository that other startups and enterprises can use to setup/manage their infrastructure in an automated way” in tandem with “high-security protocol resources hosted in the enterprise.”

Web 3 Foundation also offers grants through the Open Grants program.

Dieter Fishbein, Head of Ecosystem Development at Web3 Foundation, has a hopeful wish that the solutions provided by Swisscom Blockchain will reduce the cases of “validator unresponsiveness.” In his statement, he stated,

“Providing Kusama and Polkadot with a Kubernetes Operator contributes to a more robust network, helping validators ensure high availability in their operations, and reducing the chances of validators getting slashed for unresponsiveness.”

Polkadot is an interoperable layer 1 blockchain that “connects several chains together in a single network, allowing them to exchange data securely and process transactions in parallel.” Kusama, which runs on a similar codebase to Polkadot, enables users and development teams to deploy their projects faster on Polkadot.

Flores further commented on the partnership stating his hopes for a better and more secure future for Polkadot. He said,

“Looking ahead, we are hopeful that our contributions to the Web3 Foundation on the automated deployment of sentry and validator nodes will be useful for other enterprises to engage in the Polkadot ecosystem.”

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Author: Lujan Odera

Kraken Exchange Onboards Swiss Bank InCore to Help Euro Clients Buy Crypto With Fiat

Swiss Bank InCore has just become the first banking institution in the nation to provide banking services to Kraken crypto exchange.

The deal, which was made public on Friday, will allow Kraken clients to finance their trading accounts using four different currencies – British pound, Swiss franc, Canadian Dollar, as well as the euro.

InCore Bank CEO, Mark Dambacher, explained that the services would be available to both institutional and individual clients. He stated:

“Private and institutional clients who want to diversify their portfolio in an intelligent and innovative way with Kraken can transfer fiat assets via InCore Bank to the crypto exchange.”

Dambacher expressed the bank’s gratitude in partnering with Kraken. He said that since cryptos are virtual assets, they will be an essential addition to the bank’s modern asset management portfolio as they can be used for both payments as well as investment for future use.

The partnership comes as no surprise to many banking analysts as the bank seems to be strategically positioning itself towards blockchain apps, tokenization as well as cryptos.

To start with, clients within Europe will only be able to deposit euros to their accounts via the Single Euro Payments Area (SEPA) platform, a payment platform developed by the EU to ease euro bank transfers. However, the two firms plan to include the Swiss franc (CHF), Canadian dollar (CAD), and British pound (GBP) during the third quarter of the year.

Although its headquarters are in the US, Kraken is currently Europe’s biggest crypto exchange based on its Europe’s volumes. The firm has been at the forefront to expand its services, and, last month, it expanded to Australia after the addition of the Australian Dollar in its platform.

Kraken’s head of banking and payments, Maximilian Marenbach, explained that the partnership with InCore would not only help in enhancing its service delivery but also build a secure link between the conventional financial system with the crypto sector. He praised InCore for their grasp of the potential of the digital assets. He added that this would make the bank a formidable funding partner for Kraken customers.

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Author: Joseph Kibe

Bitcoin Suisse Adds Tezos (XTZ) Staking & Custodial Support to Institutional Grade Vault

Bitcoin Suisse – the Swiss crypto brokerage firm – has announced custodial and staking support for Tezos on May 19th, in order to lure more institutional clients to its platform.

Staking has been the hottest trend in the crypto space this year, given major exchanges across space have added support for Tezos [like Bitfinex and Binance.US] and other Proof-of-Stake based tokens. The broker platform would be using its PwC-audited high-security vault to store the staked coins.

The Swiss brokerage firm has over $1 billion worth of assets under its custody and the Tezos delegation and support will be made available via its Bitcoin Suisse Vault.

Proof-of-Stake (PoS) based blockchain platforms allow users to stake their coins for a fixed period of time and earn ‘interest’ on the staked tokens.

The crypto-verse calls it staking ‘rewards’ instead of ‘interest’ earnings to avoid regulatory clampdowns, but both processes are quite the same. The only way that staking differs over traditional Interest is that staking offers governing rights to stakers on the blockchain, with staked tokens being used to maintain the blockchain network as well.

Niklas Nikolajsen, the founder of Bitcoin Suisse, is a firm believer in Proof-of-Stake and even suggested that it is a superior consensus to Proof-of-Work. Nikolajsen believes PoW based blockchains, which is Bitcoin primarily, leads to the heavy loss of electricity and is less efficient when compared to PoS systems.

The Bitcoin Suisse platform has been offering Tezos staking services for almost two years now, first started in July 2018, however, under the newly announced scheme, they would use their highly secure and PwC audited vault.

The firm claimed that the decision was taken looking at the increasing interest of institutional clients in various crypto products, especially the staking services, with hopes that their decision would bring in more institutional clients to their platform.

Bitcoin Suisse was also among the partners that supported the latest product of Tezos called tzBTC, which is a bitcoin-backed token on Tezos blockchain.

Roman Schnider, CFO, and Head of Operations at the Tezos Foundation commented on the launch of Bitcoin Suisse secure vault based staking launch saying:

“Tezos was created with fundamental security features like formal verification that allow for institutional-grade smart contract security.

As more institutional adopters and investors get involved with the Tezos protocol, institutional-grade custody services […] will be an integral part of the ecosystem.”

[Also Read: $35.4B Investment Bank in Latin American Issues Tokenized Real Estate on Tezos Blockchain]

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Author: James W

Libra Submits Payment System License to FINMA, Association Updates Its White Paper

  • Libra is on its first steps to receive a payment service license from the Swiss authorities.
  • The “outcome and duration of the procedure” to grant a payment license to the Facebook-led cryptocurrency remains open.
  • David Marcus, Libra CEO, launches new whitepaper revealing plans to introduce single-currency stablecoins and more compliance regulation on the platform.

In an official report released on Thursday, April 16, 2020, the Swiss Financial Market Supervisory Authority (FINMA) acknowledged they had received a payment license application by Libra. This marks a step towards regulation by the Facebook-led Association after facing multiple run-ins with global financial authorities. However, the process to obtain the license remains open.

In the application, FINMA claims Libra has significantly changed this application from the initial one posted with FINMA in 2018 for a “stable coin.” The report reads,

“The application filed differs considerably from the project originally submitted (see link), e.g. with a view to the Libra payment system also supporting single-currency stable coins as well as the multi-currency Libra payment token.”

Libra eases “global currency” push with latest move

Regulators and central banks around the world have to some extent been against the adoption of Libra. Their main concern has been that a Libra currency could possibly challenge other sovereign currencies. With Facebook’s 2.7 billion audience, banks fear that Libra has the potential to dominate cross border payments globally. Some of the giant Libra members like MasterCard, PayPal, eBay and Visa were forced to withdraw from the project amid all the uncertainties revolving around it.

Now, the Association looks to lean into regulation to soften the stance taken by global financial authorities. According to David Marcus, Libra will develop a “comprehensive network-level system around anti-money laundering (AML), Combating the Financing of Terrorism (CFT), and sanctions enforcement” in a bid to follow regulation and ease monetary regulators concerns.

David Marcus also tweeted on the developments made by the association since launch stating the massive progress in members’ contribution and self-funding nature of the Association – Facebook only contributing 10% of the total fund. Marcus also touched on the switch to a multi-currency Libra stablecoin backed by different top fiat currencies.

David Marcus unveils new updated Libra whitepaper

Calibra CEO, David Marcus unveiled the changes expected on Libra platform since launching back in June 2019. The newly unveiled whitepaper introduces four main changes including addition of multi-currency Libra stablecoins, switching to a permissionless network, security systems to strengthen the quality of the Libra Reserve and securing the system with a “robust compliance system”.

The key update is the addition of multi-currency stablecoins backed by different fiat currencies such as USD, EUR and GBP alongside the singlestable coin backed by multiple currencies, Libra. This is in a bid to please the regulators who have been biting their backs since their launch. The whitepaper reads,

“We are therefore augmenting the Libra network by including single-currency stable coins in addition to ≋LBR, initially starting with some of the currencies in the proposed ≋LBR basket (e.g., LibraUSD or ≋USD, LibraEUR or ≋EUR, LibraGBP or ≋GBP, LibraSGD or ≋SGD).”

“This will allow people and businesses in the regions whose local currencies have single-currency stable coins on the Libra network to directly access a stable coin in their currency.”

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Author: Lujan Odera

Swiss Crypto Association Rolls Out A 1:1 Bitcoin-Backed ‘tzBTC’ Token on Tezos For DApps

A consortium of Swiss based crypto firms have come together to launch “tzBTC”, a bitcoin-backed token on Tezos blockchain in a bid to kick-start decentralized finance (DeFi) on its programme.

This recent move to incorporate bitcoin onto Tezos blockchain is a step closer in rivaling Ethereum blockchain which introduced bitcoin applications more than a year ago. DeFi evidently grew rapidly on Ethereum in 2019. Tezos blockchain was launched back in 2018 with an aim of playing host to a new generation of decentralized finance (DeFi), social and business projects.

The Tezos Foundation has teamed up with Bitcoin Association Switzerland along with a number of Swiss digital asset service providers among them including Sygnum, Inacta, Swiss crypto token and Bitcoin Suisse to create the TZBTC digital token. The token gives its holders the ability to interact with Tezos smart contracts while attaching on the value of the Bitcoin. Tezos foundation operational head Roman Schnider told swissinfo.ch that the collaboration openly demonstrated that Switzerland is a leader in financial innovation.

Lucas Betschart the president of Bitcoin Association Switzerland said in a press statement that the new token brings the brand and the liquidity of the blockchain. Furthermore, it gains the potential for rich functionality made possible by Tezos smart contracts. The head of operations at the Tezos Foundation Roman Schnider said that atomic swaps are for building out DeFi exchanges and perhaps a wrapped Ethereum (ETH) token. He more so insisted that this partnership was the first in kind but was a roadmap to a better future on the same front.

The main consideration under the recent integration was that intermediaries such as banks and lawyers were not paramount during exchange of items of value. This promises to ease full operations while promoting accessibility and flexibility. This new system all but ensures that privacy will be preserved, as well as bring efficiency and transparency to established digital systems.

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Author: Lujan Odera