Since Silvergate Capital and Signature Bank’s collapse this month, cryptocurrency firms have increasingly sought Swiss banking partners to capitalize on their crypto-friendly regulations. According to an anonymous advisor at a private Swiss bank, inquiries and requests from digital currency companies have been pouring in over the past few days—more than they had ever seen before. However, this immense interest among crypto firms in doing business with Swiss banks shows how U.S. financial regulators have tightened their grip on banking institutions, prompting many to look abroad for potential banking partners.
Clear regulations make Swiss banks highly attractive to crypto firms
In light of the recent developments in the banking industry, Sygnum Bank, a major Swiss bank, has seen an influx of onboarding requests from global customers. According to Dominic Castley, Sygnum’s Chief Marketing Officer, investors, asset managers, and blockchain projects are looking to use their Swiss and Singaporean branches as a secure and reliable way to diversify their crypto investments.
Swiss banks have recently become the subject of much interest from cryptocurrency firms due to their clear regulation, which provides stability and certainty compared to other regions. The United States regulatory landscape concerning crypto assets, such as whether they are classified as securities or not, is still a point of contention. Thierry Arys Ruiz, CEO of AgAu.io based in Switzerland, emphasized the benefit of operating within a more stable environment with clearly defined regulations.
The collapse of Silvergate bank caused an alarm among markets when $3.3 billion belonging to USDC stablecoin issuer Circle were left stranded in the bank, resulting in the USDC losing its 1:1 peg to the U.S. dollar.
U.S. lawmakers and regulators have attributed the fall of three major banks in the country to crypto, but Cathie Wood, founder, and CEO of Ark Invest, has a different opinion. On Twitter, she declared: “in our view, crypto is actually a solution to the central points of failure, opacity, and regulatory mistakes within the traditional financial system – which have merely been made the scapegoat for policy mistakes. If crypto moves offshore, it will deprive the United States of one of its most important innovations in history.”