The Zug, St. Gallen, and Lucerne cantonal banks have been offering cryptocurrency services for six months. Now, the Cantonal Bank of Zürich (Zürcher Kantonalbank, ZKB) is close to launching a similar service for Bitcoin (BTC) and Ethereum (ETH), as reported by CVJ.CH.
Yesterday evening, both cryptocurrencies appeared in the trading section of the ZKB mobile app, labeled as ”digital assets.” While the app currently displays historical price developments in US dollars, customers cannot yet trade these cryptocurrencies. This positions them similarly to restricted securities, providing only price information. However, sources close to the matter confirmed that ZKB is nearing the launch of a crypto trading service. When contacted by CVJ.CH, the press office did not confirm these rumors, stating, ”The bank continuously analyzes its range of services and products and adapts them to changing customer needs. Information on new products will be communicated at the time of their launch.”
A Growing Trend Among Cantonal Banks
In October 2023, the Cantonal Bank of Zug made history as the first Swiss state institution to offer direct access to six cryptocurrencies. This service has seen strong customer demand, as confirmed by ZugerKB in an interview with CVJ.CH. Following Zug’s lead, the Cantonal Bank of St. Gallen entered the crypto market a few weeks later, and Lucerne joined in March 2024.
”Like other topics, the cantonal banks are in loose contact with each other. I am convinced that other institutions will join in. I don’t want to speculate on when and in what form these offerings will come to the market. In five years, not all cantonal banks will offer crypto investments, but we will not be the only ones offering digital asset investments alongside LUKB and SGKB,” said Jan Damrau, Head of the Corporate Management Department at the Cantonal Bank of Zug.
According to well-informed sources, ten state banks are allegedly on the verge of launching their own crypto products, as reported by Finanz und Wirtschaft two weeks ago. This indicates that more than half of all cantonal banks are exploring the topic. The elephant in the room remains the Cantonal Bank of Zurich. With total assets of 200 billion Swiss francs (CHF), ZKB manages the most money of any state-owned bank in Switzerland. Although ZKB has not provided any information about a planned crypto offering, various discussions with industry representatives suggest that such an offering is imminent. The official release date remains the biggest unknown.
Increasing Competition in Swiss Financial Services
Other Swiss financial institutions are also moving into the crypto space. PostFinance launched its crypto offering in February, motivated by strong customer interest. Since 2019, PostFinance has seen over 1 billion CHF in outflows to crypto exchanges, with pioneers like Swissquote benefiting from these outflows. To retain customers, institutions need to develop their own offerings.
However, some banks remain cautious. UBS, for instance, has expressed little enthusiasm for the asset class, despite the rapid progress of pilot projects with digital assets in Switzerland. The CBDC project ”Helvetia III” involves the Swiss National Bank (SNB), UBS, ZKB, Commerzbank, Hypothekarbank Lenzburg, and the cantonal banks of Vaud and Basel.
Featured image from: cryptovalleyjournal.com