UBS expands into crypto market for individual clients

Switzerland’s UBS Group AG may soon let regular customers buy and sell cryptocurrencies, the bank’s top executive said this week, though he stressed the firm won’t rush into digital currency technology.

CEO Sergio Ermotti told investors on Wednesday that UBS is working on basic systems needed to handle crypto and looking at ways to serve different types of clients. “We are building out the core infrastructure and exploring targeted offerings from crypto access for individual clients to tokenized deposit solutions for corporates,” he said during the bank’s earnings call. These remarks come as the lender continues to integrate operations following its acquisition of Credit Suisse.

Gradual rollout over the coming years

The Zurich bank plans to take a careful approach with digital money, Ermotti explained. He described UBS as “pursuing a strategy of being a fast follower” when it comes to assets using blockchain technology. The bank expects this work to unfold gradually over the next three to five years and will add to what it already does for customers.

Bloomberg News reported last month that UBS is picking business partners to help launch crypto trading for some of its rich clients. This would mark a big change for the Swiss bank, which has been wary of digital coins until now.

Regulatory concerns slow adoption

UBS isn’t alone in moving slowly. Most big international banks have spent their time building blockchain systems for things like digital investment funds and money transfers rather than jumping into crypto trading. The main reason? Tough rules that require banks to hold extra capital when dealing with cryptocurrencies, part of regulations known as Basel III. These global standards set strict limits on how much risk financial institutions can take with unbacked digital tokens.

Ermotti made clear the bank will grow its crypto business alongside its regular banking work over the coming years, taking a measured path rather than racing ahead of competitors in the digital asset space.