Tokyo (SCCIJ) – Switzerland is successfully positioning itself as a pioneer in safeguarding digital assets and strengthening its role in global wealth management. This conclusion can be drawn from the first Swiss Digital Asset Custody Report 2023 released by the promotion body of the Swiss blockchain industry. Also, the city of Zug has been chosen by the news platform Coindesk as the number one global crypto hub.
The Swiss Digital Asset Custody Report 2023 highlights the strengths of Switzerland’s blockchain industry (© Pixabay).
Innovative ecosystem
The Swiss Digital Asset Custody Report 2023 (download) provides comprehensive insights into the custody of digital assets in Switzerland. It highlights the innovation and diversity of the Swiss ecosystem, introduces the world of digital asset custody, and sheds light on the associated risks, such as operational, security, cyber, and regulatory uncertainties.
Secure custody of assets is critical, as custodial service providers must manage risk while ensuring the safety of their clients’ assets. Private key custody is critical to the recoverability of digital assets, and erroneous transactions are difficult to correct due to the irreversibility of blockchain transactions. Balancing security, convenience, transaction speed, and cost present an important optimization problem.
Diversity of providers
The Swiss ecosystem is diverse and includes various business models and providers, from technology companies to universal banks. Another indication of diversity is the client base. 50 percent of respondents serve retail, professional, and institutional clients, with 26.5 percent exclusively serving professional clients.
The Custody Report identified 34 institutions, including established companies such as Bitcoin Suisse and Crypto Finance and newer players such as Berner Kantonalbank BEKB. 44 percent of the providers are banks – such as Julius Bär or Vontobel and Credit Suisse (now UBS) – which offer trading and staking services in addition to asset custody.
“Private markets hold the greatest potential for digital assets, especially in areas not yet traded on traditional exchanges, such as digital bonds,” points out Alexander Brunner, author of the report and president of “Home of Blockchain.swiss”, a lobby of the Swiss blockchain industry. “Custody in facilitating institutional adoption is crucial. In this context, it is essential to manage private keys securely.”
“Tiny is mighty”
Confirming that Switzerland has a lead in the field of blockchain and cryptocurrencies, the New York-based information platform Coindesk has placed the Swiss city Zug at the top of its global Crypto Hubs 2023 ranking, followed by Singapore, London, Seoul, Dubai, and Abu Dhabi. Selection criteria included a beneficial regulatory structure, digital infrastructure, and quality of life.
In a detailed article, CoinDesk explains why it gave first place to Zug: “Tiny is mighty when it comes to Zug’s performance.” The small town, which was the birthplace of the Ethereum cryptocurrency in 2015, “has it all: regulatory clarity, crypto-friendly banks, and a lively crypto job market and events calendar.” However, since Zug is so small, the nearby cities of Zurich, Bern, and Geneva are also considered part of Crypto Valley.
Text: SCCIJ with material of Blockchain.Swiss
