According to sources, cryptocurrency companies have flooded Swiss banks with requests and inquiries ever since the failure of two American banks.
Silvergate Capital and Signature Bank, two of the largest crypto-friendly banks in the US, were closed down earlier this month. Crypto companies have been looking for banking partners abroad as US regulators tighten their control over banking institutions.
According to the most recent CNBC report, the majority of these cryptocurrency companies have contacted crypto-friendly Swiss banks and flooded them with requests for banking services. Although the banking crisis has given digital assets a boost, crypto companies still require banking partners as a source of liquidity.
Since Silvergate and Signature Bank, the two largest lenders for the cryptocurrency industry, have gone out of business, crypto firms are looking to Swiss banks for support. Switzerland has established itself as a crypto hub over the last few years and has a clear regulatory framework in place.
We have been overwhelmed with requests, an unnamed advisor at a private Swiss bank told CNBC. He continued by saying that the private bank has been bombarded with demands ever since Silvergate and Signature failed. It’s crazy, the advisor said.
It’s interesting that despite recent turmoil at Swiss banks like Credit Suisse, inquiries keep coming in. This incident brought Swizerland’s finances to a precipice, but it hasn’t stopped cryptocurrency startups from hunting for potential banking partners.
US Crypto Companies Switching to Swiss Banks
One of the biggest Swiss banks, Sygnum, which caters to crypto companies, has experienced a significant increase in inquiries. They already obtain a Singapore capital market license and a Swiss banking license to conduct business there. Sygnum’s chief marketing officer, Dominic Castley, stated:
“We have noticed a considerable spike in onboarding inquiries from various overseas regions over the past few weeks as the current banking industry events have unfolded,” the company stated. According to Sygnum Bank, interest is “primarily coming from investors, asset managers, and blockchain projects looking to diversify their crypto investments.”
Clear rules are one of the main factors for cryptocurrency companies to look for banking partners in Switzerland. Switzerland is a great place for cryptocurrency players to operate since it provides a stable working environment. AgAu.io CEO Thierry Arys Ruiz stated that the nation is in fact more “stable” and that there is “more certainty about what the rules are.”
Switzerland has established a few local hubs known as “Crypto Valley” in the Zug region. Will the US lose its dominance in the cryptocurrency industry if more and more players relocate to Switzerland?
The recent failure of three large US banks was blamed on cryptocurrency by a number of lawmakers and regulators. Cathie Wood from Ark Invests said:
“In our opinion, crypto provides a solution to the existing financial system’s key points of failure, opacity, and regulatory blunders. Crypto will shift overseas as a result of being used as the fall guy for bad policy decisions, depriving the US of one of the most significant innovations in history.