Crypto-banking has great potential, claims former head of Switzerland’s UBS
Wth every passing day, new and insightful comments on cryptocurrencies are being made by more and more people from the world of mainstream finance. Peter Wuffli, Director of newly-accredited Swiss crypto-bank Sygnum, is the latest to do so after he said that crypto-banking has great potential, citing its innovation. Wuffli previously served as the head of Switzerland’s largest commercial bank UBS, where he learnt that any implementation of major financial innovation came with a price tag.
UBS made several attempts to try and burst the mortgage-backed securities bubble. However with Sygnum, Wuffli is quite confident that distributed ledger technology and digital assets can make the financial market more efficient.
During an interview with Swissinfo, Wuffli spoke about how the crypto-market is providing substantial opportunities for mobilizing resources of finance and talent. He went on to stress on the opportunities for crypto-banking services like the ones provided by Sygnum, which can now focus on a $220 billion market for institutions and private individuals who already own cryptocurrencies.
Wuffli also stressed on the importance of DLT which according to him, offers ” faster, more reliable and cheaper technology for basic services.”
The next step for crypto-banking services would be tokenization of assets
Sygnum and SEBA were granted banking licenses by the Swiss regulatory body just last month, making them one of the first crypto-banking service providers. Since these crypto-banks have been granted banking licenses just recently, the immediate goal is to provide banking services to numerous institutions, as well as small-time traders. However, the larger goal would be the tokenization of different asset classes.
Wuffli also spoke about the role of DLT in terms of the democratization of financial markets. He said,
“DLT gets to the very core of how a financial institution is designed, which is accounting. In traditional accounting, you have three or four layers of control: the bank’s internal accounting department, internal audits, external audits, and the bank supervisor.”
“DLT is an accounting system that ensures that everything is traceable and correct and can create control through consensus building across various parties. This is better than a hierarchical chain of bureaucratic controls. I find that powerful.”
Wuffli also advised caution, stating that one should not overestimate the role of technology, and that investors must weigh-in good judgment about risks and returns before making the investment in crypto, just like any other asset class.