A Swiss cryptocurrency startup SEBA Crypto AG (SEBA – Swiss Egyptian Business Association) is seeking to build a regulated cryptocurrency bank that offers cryptocurrency services to individuals and institutions.
To this end, the startup has raised 100 million Swiss francs (approximately $104M) from several investors including Swiss-based BlackRiver Asset Management and Hong Kong-based Summer Capital, among other individual and institutional investors from Switzerland, Singapore, Malaysia, China, and Hong Kong. SEBA, based in the Crypto Valley of Zug, is headed by former UBS managers Guido Buehler as the chief executive and Andreas Amschwand as the chairman of the board. The startup also includes several other former employees of UBS.
The proposed new bank will also offer traditional banking facilities to other banks seeking to tap into the new blockchain technology. To this end, the firm has applied for a banking and securities dealer license from the Swiss Financial Market Supervisory Authority (FINMA). This application is in accordance with the contract that SEBA has with FINMA.
FINMA has confirmed that this request was received and is under consideration. Once this license is granted, SEBA will be able to open both online and offline (physical) banks for crypto and traditional financial services. SEBA intends to use the funds collected to offer traditional banking services to firms in the crypto industry and to also provide cryptocurrency trading, asset management, and custody services for institutions that are interested in moving to blockchain industry.
During Thursday’s announcement of the same, Andreas Amschwand commented by saying,
“In Switzerland, we have the 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.” He added that “this makes Switzerland the ideal place to launch a new financial services paradigm.”
Buehler expressed similar sentiments by saying that “SEBA wants to bridge the gap between traditional banking and the new world of crypto. With safety, transparency, and performance as core values, our ambition is to become a market leader in the convergence of traditional finance with the crypto economy.”
This announcement comes barely less than a week after the Swiss Bankers Association (SBA) gave a directive to local banks with basic guidelines on how to efficiently work with other companies within the cryptocurrency space. According to Reuters, this directive was given to prevent blockchain startups from exiting Switzerland in search of a better working environment.
In the recent past, Switzerland has seen more than 500 blockchain and cryptocurrency startups settle in the Crypto Valley, however, the blockchain space is increasingly coming under criticism for lack of clear legal structures and therefore Switzerland will be forced to create the legal framework to enable these and other future startups to comply with the law. On the other hand, the legal framework needs to be positive to encourage innovation as the blockchain space is still growing.
SEBA has also proposed to expand its operations outside of the Crypto Valley into other major financial hubs starting with Zurich in 2019.