Traditional financial institutions are still leery about decentralized cryptocurrencies. They are only starting to explore the potential of digital assets. But a new breed of banks specializing in crypto have been working hard to take advantage of this trend and are gaining regulatory recognition around the world.

Also read: How to Start With Bitcoin at No Cost

Swiss Crypto Banks Are Going Global

Switzerland has established itself as a leading crypto-friendly nation and several hundred companies from the industry are currently operating out of the crypto valley centered in the canton of Zug. The country’s financial regulators have been gradually opening towards the nascent sector. Traditional banks have been reluctant to serve entities dealing with cryptocurrencies but competition from new businesses focusing specifically on the crypto market is likely to change that.

Crypto Banks Gain Regulatory Recognition Across the Globe
Zug, Switzerland

In August, the Financial Market Supervisory Authority (Finma) licensed two companies to provide banking services to Swiss-based crypto businesses and also trade securities. Zug-registered Seba Crypto and Zurich-based Sygnum became Switzerland’s first regulated crypto banks. Another entity working with digital assets, Bitcoin Suisse, applied for a banking and securities dealer license this summer. A new venture called Tallyon expects the green light from Finma to become a ‘next generation’ private bank employing blockchain tech and working with cryptocurrencies.

These companies are not restricting themselves to Switzerland only. In late October, Sygnum was granted a capital markets services license in Singapore. According to a report by Swissinfo, the Monetary Authority of Singapore (MAS) has authorized the crypto bank to provide asset management services in the Southeast Asian city-state. Seba Crypto, which is currently focusing primarily on its upcoming launch in Switzerland, is in talks with the MAS but is yet to apply for a license. It plans to enter a number of other markets including Hong Kong, the U.K., Italy, Germany, France, Austria, Portugal, and the Netherlands. Tallyon plans for an Asian expansion too, after its launch in the Alpine country.

In a press release published on its website, Sygnum revealed their first product will be a multi-manager fund which “allocates investments across a portfolio of managers that tap into the global digital asset opportunity using different and uncorrelated investment strategies.” It will be available to institutional and private qualified investors in Switzerland in the future as well, through the company’s banking platform there. In partnership with the largest German stock exchange and Swisscom, Sygnum is also working to launch a new digital asset trading venue.

China’s Tencent Licensed to Operate ‘Virtual Bank’ in Hong Kong

The expansion of the crypto industry in any jurisdiction inevitably creates demand for related banking services. China’s recent focus on blockchain development is likely to have the same effect. Some Chinese companies are already moving to take advantage of the changing environment that creates new business opportunities.

Tencent, the tech and internet giant behind the popular messenger Wechat, has recently received a license from the Hong Kong Securities and Futures Commission (SFC) that will allow it to establish a ‘virtual bank.’ Speaking at the World Blockchain Conference in Wuzhen on Nov. 8, Cai Weige, general manager for blockchain at Tencent, revealed the holding is already gathering a team for the financial platform.

Crypto Banks Gain Regulatory Recognition Across the Globe
Shenzhen, China

According to Chinese media, the forum was devoted to blockchain, digital assets, central bank digital currency, artificial intelligence, and 5G. During his keynote speech at the conference, the high-ranking Tencent representative noted that blockchain and cryptocurrencies receive more attention now that the Hong Kong government has begun to regulate crypto transactions.

The SFC recently established a new regulatory framework that allows crypto exchanges to opt-in to be licensed and regulated, as news.Bitcoin.com reported last week. Trading platforms can now apply for a license if they meet certain requirements, including the implementation of measures to guarantee the safe custody of crypto assets.

While companies like Tencent and the Swiss fintech startups are competing to offer the best banking services to the crypto industry, traditional financial institutions have largely shied away from digital assets. That’s likely to change over time though, with the growing popularity of cryptocurrencies. For example, the Basel Committee, which includes banking regulators from the U.S., Europe and Japan, has just agreed to study the capital requirements for crypto assets held by traditional banks. But the steps in that direction are still few and by the time banks get there, the crypto banking sector will probably be occupied by plenty of ‘next generation’ banks.

Do you think dedicated crypto banks can provide better services to the crypto industry than traditional financial institutions? Share your thoughts on the subject in the comments section below.


Images courtesy of Shutterstock.


Do you need a reliable bitcoin mobile wallet to send, receive, and store your coins? Download one for free from us and then head to our Purchase Bitcoin page where you can quickly buy bitcoin with a credit card.

The post Crypto Banks Gain Regulatory Recognition Across the Globe appeared first on Bitcoin News.

Receive the latest Crypto Regulatory and Legal News via LinkedIn or Twitter:
Twitter
Visit Us
LinkedIn