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Swiss Crypto Banks Fight to Be First

Swiss crypto banks jostle to be the first to go live, and promise to do so as early as in a few months’ time. But even if they may be close to their goal, they still face hurdles and delays remain a distinct possibility.

Seba, a Zug-based crypto firm, landed a double coup yesterday. Not only was the company able to announce a deal with a prestigious partner, Julius Baer, the private bank with its headquarters at Zurich’s Bahnhofstrasse. The entrepreneurs also managed to get the name of their company associated with «crypto bank» – even though the firm has yet to receive its license from the Swiss regulator, Finma.

But Seba seems pretty confident that the license will be forthcoming and predicted the go-ahead for the second quarter. People close to the company expect the green light to be given in the month of May. Getting the license from Finma is also pivotal for the cooperation with Julius Baer to commence in earnest, as the companies confirmed in their statement on Tuesday.

A Departure From the Discrete Way

The way of advance communication is unusual for an industry that tends to keep quiet for fear that brash statements can upset the gatekeepers in Bern, the Swiss capital. A miffed regulator is in nobody’s interest.

Seba seems not overly worried, which may yet come to haunt the firm, an expert suggested in an interview with finews.com.

With Flynt Fresh in Memory

Finma is most reluctant to issue banking licenses to companies with new business models – despite the pronounced wish to see more fintech innovation in Switzerland. After all, Jan Schoch, the erstwhile founder of Leonteq, in 2017 had to give back the banking license for his fintech named Flynt a short time only after Finma had signed off on it.

So the idea of licensing crypto banks isn’t met with great enthusiasm in Bern, the source said. A spokesman for the regulator said the governing body was always looking very closely into whether the conditions had been met before issuing a banking license.

Some Like It Different

The need to have a license is not universally acknowledged in crypto world. «We studied the possibility of acquiring a banking license closely in 2018 and decided against trying to get one,» Crypto Finance, a Zurich-based crypto asset firm, said in a statement.

The company however is in the process of applying for a license as a securities dealer. Another firm going down that road is Lykke, which also once had flirted with the idea of getting a banking license.

Here’s a list of companies that still aim to acquire a banking license from Finma:

1. Mt Pelerin: Full Banking Services

Mt Pelerin from Geneva in 2017 let it be known that it aimed to become a bank. It hopes to achieve the status by year-end 2019. It wants to use the proceeds of a token sale in January to develop a range of banking services.

The startup harbors ambitious plans to generate a fully digital market place and platform open to other financial market participants.