Another financial institution has thrown its hat into the ring to become a future crypto bank in Switzerland. Bitcoin Suisse has applied for a license from the financial supervisor and is also seeking authorization to trade securities.
The Swiss banking landscape has experienced a dramatic thinning of numbers in recent years. The number of banks fell from 337 in 2005 to 248 in 2018, while last year saw five more banks disappear without trace. The arrival of crypto banks would provide a rare growth area for the industry.
Bitcoin Suisseexternal link said on Tuesday that it has joined SEBA and Sygnum in bidding for a banking license from the Swiss Financial Markets Supervisory Authority (FINMA). Each of the three companies is focusing on the crypto assets market, although the authorization they are seeking is no different from any other banking or securities dealer license.
David Riegelnig, who is coordinating the license application, told swissinfo.ch that Bitcoin Suisse imagines itself as a smaller “category 5external link” player in the banking landscape. The company, formed in 2013, currently offers a range of services, including brokerage and storage, to cryptocurrency holders. It also issues a Swiss franc-backed stablecoin.
“A securities dealer license would enable us to trade crypto tokens that have been classified as securities by the financial regulator. This would include our own crypto franc product,” said Riegelnig. “And we anticipate more securitized digital assets arriving in the market place.”
A banking license would open the door to Bitcoin Suisse to offer structured products and derivatives such as swaps. It would also consider offering corporate banking services for blockchain start-ups, but says it would be selective in choosing firms.
No movement yet
FINMA has remained tight-lipped about when – and indeed if – it will grant such licenses. Some observers believe the financial supervisor will announce several license awards together to avoid giving any one company a competitive advantage.
Bitcoin Suisse is several months behind the applications of other budding banks that are starting from scratch. But the company believes its six-year track record of business growth will stand it in good stead. “We already have working anti-money laundering controls in place and have demonstrated prudent balance sheet management,” said Riegelnig.
The Zug-based company has 95 employees (also in Denmark and Liechtenstein) and achieved net revenues of CHF43.7 million ($44.4 million) last year. It plans to apply for a Liechtenstein banking license in future, having opened a branch there last year.