Switzerland aims to position itself as a European leader in the cryptocurrency world. This becomes apparent when looking at the adoption of crypto assets. Additionally, several banking licenses have been issued to what is referred to as “crypto banks” This is a clear sign the future of cryptocurrency looks somewhat promising. although no one should expect any miracles. .
Switzerland Forge Ahead
There are several reasons why Switzerland is such a prominent region for cryptocurrencies and blockchain. The country has a history as being a financial haven. The Swiss banking system is legendary all over the world. Additionally, it is one region showing a growing interest in fintech on a broad scale. That includes the use of Bitcoin and top altcoins for a wide variety of purposes.
Speaking of cryptocurrencies, the Zug initiative is perhaps best-known. It is a part of Switzerland where cryptocurrencies are embraced in every possible way. Residents can even pay for select goods and services in Bitcoin, which confirms it is a viable payment method. Now that crypto banks are becoming a thing in this part of Europe, the future will only get more interesting. The big question is whether other European countries will follow suit in the near future.
What are Crypto Banks?
As the name suggests, this is not an ordinary financial institution. It allows approved companies to offer services in the world of tokenized digital securities. It is a very limited functionality compared to the way banking works on a normal level. Token transfers, for example, can only occur between individuals known by the crypto bank in question.
It is not allowed for supervised institutions to receive tokens from customers or other institutions. Nor can they send tokens to these customers. Those restrictions apply every time the sender and recipient cannot be transmitted reliably in the payment system. These are issues which can be easily resolved, yet it will pose some challenges for the crypto banks getting approval now or in the future. These limitations are part of the new AML regulations issued to Swiss banks recently.
Who Received Approval?
Banking licenses will not be issued to crypto banks on a silver platter. To this date, only two applicants have received official approval from FINMA. SEBA, a firm based in Zug, will enter its operational state in October of 2019. The company is still working out some regulatory kinks. Their focus will be on corporate and asset management services. There is no official word on availability, pricing, or which assets will be supported as of yet.
The other entity entering the fray is Sygnum, a Zurich-based outfit. This company has made some headlines recently. Not only did it partner with Swisscom, but also with the German stock exchange. Other partners are also part of the crypto bank initiative. Their joint goal is to list and trade tokenized securities on a blockchain platform. It too needs to work out some minor kinks, but that should not cause any major problems at this time.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency or digital currency.