Switzerland has created what they call “Crypto Valley” in the Zug region.
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Crypto companies are scrambling to find institutions where they can bank after they fail Signature bank AND The capital of Silvergatetwo lenders who were friendly towards digital currency companies.
According to many industry insiders who spoke to CNBC, some of these companies have turned to cryptocurrency-friendly Swiss banks, inundating them with requests for banking services.
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Typically, the crypto industry struggles to access banking services from traditional lenders who don’t want to touch anything that doesn’t have a clear regulatory framework. This includes blockchain and crypto companies that have had to turn to specialized banks instead.
But with the two biggest lenders, along with the SVB, now out of reach, cryptocurrency firms have turned to Switzerland, which has sought to market itself as a crypto hub with robust regulations.
“We’ve been inundated with requests,” said an adviser to a private Swiss bank, who preferred to remain anonymous due to the sensitive nature of the case.
An adviser said Monday after the liquidation of Silvergate and Signature Bank earlier this month, the private lender had more applications in one day than ever before.
“It’s just crazy,” said the adviser.
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American and non-European companies are turning to Switzerland
Dominic Castley, chief marketing officer at Sygnum, one of Switzerland’s largest banks that focuses on serving digital asset firms, said he was seeing an influx of inquiries.
“Over the past few weeks, as current events in the banking industry unfold, we have seen a significant increase in onboarding inquiries from various international locations,” said Castley, adding that Sygnum’s Swiss and Singapore locations are attractive to businesses.
Sygnum holds a Swiss banking license and a license to provide services on the capital markets in Singapore, thanks to which it is subject to the supervision of regulatory authorities.
One Swiss financial technology firm adviser, who also preferred to remain anonymous due to the sensitivity of the situation, said Swiss banks had “a lot more influx of US customers.”
Meanwhile, a director at a European trading firm said their firm was seeing “non-European entities” asking about a new banking relationship. The executive, who wished to remain anonymous due to the sensitive nature of the topic, said these firms include cryptocurrency-focused hedge funds and venture capital firms.
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Castley said the interest “comes mostly from investors, asset managers and blockchain projects looking to diversify their cryptocurrency investments with a trusted Swiss partner like Sygnum Bank.”
Switzerland’s other major digital asset lender, SEBA Bank, did not respond to a request for comment when contacted by CNBC.
Switzerland’s crypto-friendly attitude
One of the reasons companies look to Swiss banks is because the country’s regulations are friendly to cryptocurrency companies in need of a stable operating environment.
The country has created what locals call the “Crypto Valley” in the Zug region, just outside the Swiss city of Zurich, where start-ups and more established digital currency companies have opened their shops.
In 2021, the government introduced a regulation on companies using the so-called “distributed electronic ledger technology” or blockchain, which originated from the bitcoin cryptocurrency but has since evolved.
Thierry Arys Ruiz, CEO of Swiss blockchain company AgAu.io, said Switzerland is “more stable” and “there is more confidence in the rules.”
An anonymous adviser to a private Swiss bank said companies are coming to Switzerland to be in a “safer jurisdiction” for crypto regulation.
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Correction: This story has been updated to remove the incorrect reference to Zurich.