Switzerland has created what they dub “Crypto Valley” within the region of Zug.
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Crypto firms are scrambling to seek out institutions to bank with after the collapse of Signature Bank and Silvergate Capital, two lenders that were friendly to digital currency corporations.
A few of these corporations have turned to crypto-friendly Swiss banks, flooding them with requests for banking services, in keeping with multiple industry insiders who spoke to CNBC.
Typically, the crypto industry has found it difficult to access banking services from traditional lenders, who don’t need to the touch anything that doesn’t have a transparent regulatory framework. This has included blockchain and crypto firms, who’ve as an alternative needed to turn to specialist banks.
But with two of the largest lenders, together with SVB, now out of the image, cryptocurrency firms have turned to Switzerland, which has sought to market itself as a crypto hub with solid regulation.
“We’ve got been inundated with requests,” said an advisor at a personal Swiss bank, who preferred to stay anonymous because of the sensitive nature of the matter.
The advisor said on the Monday after Silvergate and Signature Bank’s winddown this month, the private lender had more requests in a single day than ever before.
“It’s just nuts,” the advisor said.
U.S., non-Europe firms look to Switzerland
Dominic Castley, chief marketing officer at Sygnum, considered one of Switzerland’s biggest banks that is concentrated on servicing digital asset corporations, said it’s seeing an influx of enquiries.
“Over the past weeks as the present banking industry events have unfolded, we’ve got seen a big increase in onboarding enquiries from various international locations,” Castley said, adding that Sygnum’s location in each Switzerland and Singapore is attractive to corporations.
Sygnum has a Swiss banking license and a capital markets services license in Singapore, bringing it under the purview of regulators.
One Switzerland-based advisor to financial technology corporations, who also preferred to stay anonymous because of the sensitivity of the situation, said that has been “so much more inflow from U.S. customers” to Swiss banks.
An executive at a European trading firm, meanwhile, said their company had been seeing “non-Europe based entities” making enquiries for brand spanking new banking relationships. The manager, who wished to stay anonymous because of the sensitive nature of the subject, said these firms include crypto-focused hedge funds and enterprise capital firms.
Castley said interest is “mainly coming from investors, asset managers and blockchain projects seeking to diversify their crypto investments with a trusted Swiss partner like Sygnum Bank.”
Switzerland’s other major lender that deals with the digital assets industry — SEBA Bank — didn’t reply to a request for comment when contacted by CNBC.
Switzerland’s crypto-friendly stance
A part of why corporations are searching for out Swiss banks is the country’s regulation which is welcoming to cryptocurrency firms in need of a stable operating environment.
The country has created what locals dub “Crypto Valley” within the region of Zug, just outside the Swiss capital Zurich, where start-ups and more established digital currency firms have arrange shop.
In 2021, the federal government introduced a regulation on corporations using so-called “distributed electronic register technology” or blockchain, which originated with the cryptocurrency bitcoin but has since evolved.
Thierry Arys Ruiz, CEO of Swiss-based blockchain firm AgAu.io, said Switzerland is “more stable” and there may be “more certainty to what the foundations are.”
The anonymous advisor on the private Swiss bank said that corporations are coming to Switzerland to be in a “safer jurisdiction” for crypto regulation.
