With two major crypto-friendly banks, Silvergate Capital and Signature Bank collapsing this month alone, cryptocurrency firms have shifted their interests to Swiss banks and have been flooding potential banking partners with inquiries and requests over the past few days.
As U.S. financial regulators tighten their grip on banking institutions in the country amid the chaos after the collapse of Silvergate and Signature, several cryptocurrency firms and digital currency companies are reportedly considering doing business with crypto-friendly Swiss banks because of Switzerland’s crypto-friendly regulations.
“We have been inundated with requests,” an advisor at a private Swiss bank who wanted to remain anonymous told CNBC. The person further said that the private lender where they work received more requests in a day than ever before, describing the situation as “just nuts.”
“Over the past weeks as the current banking industry events have unfolded, we have seen a significant increase in onboarding inquiries from various international locations,” Dominic Castley, chief marketing officer at Sygnum, one of the major banks in Switzerland, said, noting that the bank’s location in Switzerland and Singapore is attractive to companies.
Castley further revealed that interests are “mainly coming from investors, asset managers and blockchain projects looking to diversify their crypto investments with a trusted Swiss partner like Sygnum Bank.”
Industry watchers believe that one of the main reasons behind crypto firms’ sudden interest in Swiss banks is because of their clear regulations, something which financial regulators in the U.S. are still arguing about, especially in terms of classifying crypto assets as security or not.
Switzerland’s clear regulations provide stability in the operating environment, making it an ideal location for cryptocurrency firms and executives to operate in the country. Thierry Arys Ruiz, the CEO of Swiss-based blockchain firm AgAu.io, mentioned that Switzerland is “more stable” and offers “more certainty to what the rules are.”
When Silvergate collapsed, USDC stablecoin issuer Circle had its $3.3 billion deposit stranded in the bank.
With the news breaking over the Internet and various media outlets, markets did not take it well, causing the USDC to lose its 1:1 peg to the U.S. dollar.
While many U.S. lawmakers and regulators point the blame to crypto for the fall of the three major banks in the country, Ark Invest founder and CEO Cathie Wood thinks otherwise.
“In our view, crypto is a solution to the central points of failure, the opacity, and the regulatory mistakes in the traditional financial system. Made the scapegoat for policy mistakes, crypto will move offshore, depriving the US of one of the most important innovations in history,” she said in a tweet.
In our view crypto is a solution to the central points of failure, the opacity, and the regulatory mistakes in the traditional financial system. Made the scapegoat for policy mistakes, crypto will move offshore, depriving the US of one of the most important innovations in history
— Cathie Wood (@CathieDWood) March 16, 2023
