Banks and cryptocurrencies—this is a regular theme in today’s crypto market. In fact, JPMorgan has been reported that it has a plan to dip into the crypto market. And this is something that is happening in different parts of the world. This time around, a Zurich-based private bank Maerki Baumann is now looking to form a partnership together with other cryptocurrency companies. The aim of this partnership is to help solve the difficulties of operating within the industry.
Maerki Baumann isn’t the first bank that has entered the cryptocurrency industry. In fact, Falcon Private Bank was the first to engage with blockchain companies. Falcon started offering crypto asset management services with its partnership with Bitcoin Suisse AG.
However, Maerki Baumann plans to do a different strategy than Falcon. It isn’t planning to offer a crypto asset management service to its clients. However, it has published a report saying that it is taking a closer look on cryptocurrencies.
The bank mentioned in its report that “Maerki Baumann is keeping an eye on the development of these investment instruments and the corresponding progress on the regulatory side, without looking to gain exposure to this young asset class at the present time. This is true not just of direct investments in cryptocurrencies, but also investments in the necessary technology for the trading and custody of these instruments”.
In addition to this, the bank also added in its report that “Maerki Baumann is generally prepared to accept funds generated through cryptocurrencies, be it through speculative transactions or in the form of payment received for services provided or from mining profits”.
Solving the Exodus
Swiss regulators were concerned regarding the exodus of cryptocurrency companies from its “Crypto Valley” mainly because of the closure of two small banks that were open to providing businesses associated with crypto-related activities.
After the closure, crypto-related businesses had a difficult time finding banks that are willing to become their partner. And because of this, many of these businesses tried to relocate to other countries with more favorable crypto-regulations.
Malta has been a primary choice for many cryptocurrency companies. There are also those that have transferred to Liechtenstein and the British Virgin Islands.
Since the crypto industry is still quite young, it is a problem for many crypto-related companies to deal with different regulations from different parts of the globe. Some countries offer a more relaxed stance on cryptos while there are those that even banned crypto-related activities completely. And for this reason, G20 has even called for a unified approach in cryptocurrencies.
In the US, there are rumors that there could actually be a crypto-related ETF soon. Though the US Securities and Exchange Commission is quite concerned regarding the possibility of price manipulation, its main reason for rejecting the Winklevoss’ Bitcoin ETF application for the second time around, many are still optimistic. Come to think of it, Bitcoin and Ethereum are now considered commodities by the agency. Just how important is regulatory clarity at this point? Experts like Tom Lee believes that regulatory clarity is a must in order to see the entry of institutional investors in the niche.