Crypto Without Big Swiss Banks

The reluctance of the big two in Swiss banking to dig into this new asset class may not come for the same reason. At UBS, the policy seems to have come from the top: Chairman Axel Weber is a known opponent of cryptocurrencies, including bitcoin. The former head of the Bundesbank in the past had made it abundantly clear he was firmly opposed to UBS doing any trading in cryptocurrencies. What's more, he believes that they form a risk for the Swiss financial market.

Tidjane Thiam, the CEO of Credit Suisse, can see no beneficial element in the bitcoin. The big banks both have strong reservations rooted in their concern about being caught out by a new wave of money laundering. Others, including private bank Vontobel, seem more at ease about this issue and trustful of checks and systems installed and strengthened in recent years.

Crypto Train Gathers Pace

The blockchain technology and applications linked to it are obviously important to UBS and Credit Suisse as well, with significant resources being ploughed into it. It may seem a little ironic that the one product to have see the light so far is the token, or cryptocurrency, something the two have rejected.

Cryptocurrencies are gaining a foothold across the world and the financial market. China’s central bank is busy developing its crypto-renminbi; Lithuania’s central bank has accepted cryptocurrencies as an investment class; J.P. Morgan is working on its own cryptocoin for internal use; Mizuho, the Japanese banking giant, in March launched the j-coin for clients; and Banco BTG Pactual from Brazil also issued its own token.

Swiss Offering

In Switzerland, Geneva-based Dukascopy issued its token, Bank Frick has a trading platform for institutional clients and Julius Baer is convinced about the future of digital assets as an independent asset class. The bank’s view was strongly influenced by their clients’ demand for such services no doubt.

The clients of Credit Suisse and UBS can’t get such services from their bank. It comes as a surprise that the two companies, which are exposed to stiff global competition, can afford to watch as events unfold in an increasingly important asset class. The two companies didn’t respond to this question.

The American Way

Jamie Dimon, the chief executive of J.P. Morgan, not so long ago issued a damning verdict on bitcoin, claiming it was fraud and destined to go under. Having giving much thought to the question of all things crypto however, he ordered his tech experts to develop a coin, the first cryptocoin to be issued by a bank for its own purposes.

UBS and Credit Suisse seem not to have caught up quite yet.