Until now, the challenge for the crypto industry is adoption. Is it practical to use cryptocurrencies for daily transactions? For a lot of cryptocurrencies, this is a challenge. Even top cryptocurrencies are struggling to be used for daily transactions. In fact, adoption is the reason why Ripple is currently bullish. Ripple has developed a product called xRapid which will then facilitate to make cross-border transactions faster and cheaper.
Unfortunately, due to the lack of regulatory clarity within the niche, banks have shunned away from cryptocurrencies. However, it seems that things are slowly changing. The switzerland-based crypto startup, SEBA Crypto AG is looking to change all of it. The crypto startup was able to come up with $100 million from both local and foreign retail and institutional investors. The funds will then be used in order to come up with a fully regulated crypto bank.
The Grand Vision
SEBA is looking to obtain a securities dealer and banking license from the Swiss Financial Market Supervisory Authority (FINMA). Andreas Amschwand who works as the Chairman of SEBA mentioned that “In Switzerland, we have commitment from various authorities to establish a comprehensive regulatory environment for the development of blockchain technology and the sustainable, stable growth of crypto assets. This makes Switzerland the ideal place to launch a new financial services paradigm”.
The vision of the startup is from the current situation that there is the gap between the existence of the crypto market and traditional financial establishments. For instance, because the crypto market is new and even unregulated in some parts of the world, mainstream financial establishments have steered away from cryptos. These have been viewed as risky. On the other hand, there are those players in the crypto market that have encountered difficulties dealing with the traditional banking system. This case is particularly true in countries such as India.
Among investors of the Swiss startup include Summer Capital and BlackRiver Asset Management AG. According to Guy Schwarzenbach who is the CEO of BlackRiver, he said that the company decided to invest after having an in-depth analysis of the crypto market. He even went on to say that if adoption continues, cryptos could potentially become a legitimate asset class for investors.
Institutional Investors Moving In?
Though fresh capital that can make a huge impact in the crypto market is still not yet pouring in from institutional investors, you already have the likes of Goldman Sachs and ICE that entered the market. Bank of America has already filed a patent for crypto custodian control. BoA has proposed a computing system that serves as a digital vault storage for these crypto assets of large-scale companies.
Circle, which is a Goldman Sach’s funded startup has also attempted to procure a banking license in the US. Circle has released its own version of a stablecoin that is backed by the US dollar. This will operate according to the regulatory framework that exists in the US.
Vitalik Buterin has mentioned that more than an ETF, what the crypto market needs is adoption. Will this kind of effort from the Swiss startup be a trend especially in the coming years?