Since the beginning of the month, the Cantonal Bank of Zug has been the first state bank in Switzerland to offer its customers trading and custody of crypto assets. So far, the offer has met with lively interest from the Zugers, and other cantonal banks are expected to launch in the course of the coming year.
By immediately launching a crypto offering, the Cantonal Bank of Zug (ger. = Kantonalbank, KB) was able to secure its place as a pioneer among cantonal banks in the first week of October. Customers of Zuger KB were given direct access to the crypto world via their e-banking without having to leave their usual interfaces. When asked by CVJ.CH, Zuger KB expressed satisfaction with customer demand so far.
Zuger KB on crypto expansion course
Specifically, Zuger KB offers six cryptocurrencies. In addition to the usual offering of Bitcoin (BTC) and Ether (ETH), customers can also trade Ripple (XRP), Polygon (MATIC), Litecoin (LTC) and Uniswap (UNI). However, some limitations are in place. Trade orders can be placed during normal service hours, but must exceed the minimum threshold of $200. In addition, settlement is in USD and not in Swiss francs. Furthermore, ZugerKB does not offer crypto investment advice.
Nevertheless, Zuger KB is satisfied with customer demand in this initial phase. While a media spokeswoman did not disclose detailed figures, a lively interest has been observed over the first weeks since launch. Zuger KB will continue to monitor the crypto market to meet potential customer needs, she said. Accordingly, an expansion of services is possible: the offer of additional cryptocurrencies, the deposit/delivery of cryptocurrencies, staking or tokenization of classic assets.
"As the leading financial institution in the Zug economic region, we want to play an active role in shaping the transformation of the financial world and if the new offering develops positively, further expand the universe of tradable assets. Investment advice in the area of digital assets is [also]a possible further offering that we are looking into." - Media Spokesperson Zuger KB
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More house banks plan offerings
It is true that the Zuger KB was the first state-owned bank to make a start. But next spring, the competition will get tougher. Both Luzerner KB (LUKB) and PostFinance, as weighty retail banks, announced their intention to launch a crypto offering in the first months of 2024. And since the market entry of Zuger KB, pressure is also growing on the remaining cantonal banks to position themselves in the crypto sector.
In response to an inquiry from CVJ.CH, Zürcher KB (ZKB) said that investments in crypto assets are currently not possible. In general, however, Switzerland's largest cantonal bank is constantly analyzing the developments surrounding digital assets, including crypto assets, and has been dealing with the associated opportunities and risks for customers for some time. The previous experiments with digital assets have ultimately been successful.
"Zürcher KB is a participant in the world's first fully regulated digital trading venue, the SIX Digital Exchange (SDX), and was instrumental in the first successful digital bond issue and the first digital issue of shares on SDX. In addition, Zürcher KB acted as lead manager for the digital bond issue of the city of Lugano in January 2023.
We expect blockchain technology and digital assets to grow in importance in the coming years. The bank is continuously analyzing its service and product offering and adapting it as needed to meet changing customer wishes and needs." - Media Spokesperson Zürcher KB
