This Wednesday, the first Web3 Banking Symposium of the Crypto Valley Association (CVA) took place. More than 300 participants gathered at the Fédération des Entreprises Romandes (FER) in Geneva to discuss the interaction between the traditional and decentralized financial worlds.
Every year, dozens of crypto events take place in Switzerland. Only a few manage to bring together all the linguistic regions of the Swiss Crypto Valley. CVA's first Web3 Banking Symposium brought together entrepreneurs, bankers and politicians from German-speaking Switzerland, French-speaking Switzerland and Ticino. The whole Crypto Valley came to Geneva. And the conclusion of the event was clear: while Switzerland has indeed established itself as a global blockchain hub, other regions are catching up. Especially in the area of regulation, the small country must not disappoint.
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Several cantons embrace crypto
Government and stakeholder representatives from Vaud, Neuchâtel, Geneva and Lugano kicked off the event. In a discussion forum, representatives from different cities and cantons explained how they are promoting the blockchain sector. While Lugano is pursuing a specific crypto strategy with its "Plan B" initiative, the French-speaking cantons are aiming to integrate the sector into the existing banking ecosystem as a whole. There was consensus on the desire to support blockchain technology across regions.
Switzerland is in a unique position to use early and pragmatic regulation to its advantage. Competition within the country is not productive. Finally, crypto hubs are emerging around the globe. Representatives specifically mentioned the Middle East, South America and Hong Kong. All Swiss cantons should therefore work together.
A cross-sector phenomenon
Next, bankers from various sectors took the stage. Apparently, there is a demand for digital assets in all segments. Business-to-business (B2B), private and retail banks all need to improve their capabilities. There is pressure from customers at all levels. Older, wealthy clients want to diversify their existing portfolios into the new asset class. The younger generation is more likely to speculate in newer assets. And banks themselves need a financial infrastructure to provide trading and custody services.
The foundation is now in place. This is illustrated by the offerings of the cantonal banks, which were also represented at the event, as well as the retail banks PostFinance and Swissquote. Some of the infrastructure providers come from the crypto world, while traditional service providers are also adapting. However, staff training remains a challenge.
Beware of a regulatory frenzy
Of course, most speakers celebrated the recent rise in price thanks to the approval of U.S. bitcoin ETFs. The Securities and Exchange Commission (SEC) has seemingly given their approval for Bitcoin. Asset management giants and sovereign wealth funds are entering the market for the first time. Several representatives identified the representation of real assets on the blockchain (tokenization) as the next narrative for the sector. However, in one-on-one conversations, most participants felt it was more hype than substance. The main reason given was the lack of regulatory flexibility.
This topic in particular was met with ambivalence. Apart from a few exceptions, the majority of panellists celebrated the early move by the Swiss Financial Market Supervisory Authority (FINMA). The authority was central to the success of Crypto Valley, they claimed. But during the breaks, we observed more negative comments. Recently, the pressure from international organizations has become too great, some participants told CVJ.CH. The Swiss authorities are giving in. By strictly implementing the Travel Rule, the Basel Crypto Standard and individual provisions of the European MiCA regulation, they are losing themselves in a kind of regulatory frenzy.
