In a surprising move, Liechtenstein’s Bank Frick announced in a press release that it now offers “direct investment” and cold storage for these five cryptocurrencies: Bitcoin, Bitcoin Cash, Litecoin, Ripple, and Ether.
Bank Frick is the first financial institution to allow their customers to use US dollars and Swiss francs to purchase cryptocurrencies. This offer targets the “professional market participants and financial intermediaries,” while it appeases the private sector’s demand for access, options, and storage. Where other countries are attempting to ban the use of cryptocurrencies by intensifying regulation, Bank Frick is creating an entrepreneurial environment beyond its borders. A statement by the bank assured that it will assist trades “within the fully regulated framework of the Bank’s processes.”
Chief Client Officer Hubert Büchel shares in the press release, “Our services are in demand from companies across the whole of Europe.” Büchel ensures people interested in cryptocurrency investing are accepted by a reliable source such as their bank. It’s a bold move to encourage, not only the private sector but also the public that they are on board with new ways of investing.
“This is because they know that we can offer them reliable support in implementing their business models with cryptocurrencies and blockchains in line with the existing regulatory framework.”
Büchel describes how this offer will serve their bank’s clientele. “Financial intermediaries, such as asset managers and fiduciaries, can make use of our new offering to successfully differentiate themselves in the market and add value for their clients.” This is helpful because “With these direct investments, intermediaries and their clients can easily get to know a new, exciting universe and diversify their portfolios. Investments in cryptocurrencies are highly speculative and so they should form only a small part of a portfolio.”
Büchel admits that by supporting new business models while maintaining a safety net with regulatory frameworks in place, its services are in high demand throughout Europe. “We aim to place crypto-banking on at least the same level of quality as traditional banking,” says Büchel. For example, cryptocurrencies are held in ‘cold storage’ wallets which gives clients a “high level of protection against loss or theft.”
Compared to the hesitancy of big banks to embrace the crypto surge, it gives smaller banks an edge by being ahead of the status quo while working within the system. Edi Wögerer, Chief Executive of Bank Frick, told the Financial Times “There are risks involved but there are also really big opportunities.” These opportunities will allow businesses to grow in new directions. With public pressure and demand growing at an unprecedented pace, it puts the onus on the business community to answer that demand. Bank Frick advises companies on initial coin offerings and scrutinizes their investors before they can even buy tokens in return for Bitcoin and Ether. Clients will be expected to abide by a verification and an identification process.
As the financial system continues to shift in lieu of this unexpected awakening with banks in numerous countries taking sides, the crypto revolution is here to stay. It’s just a matter of how it will all play out, and what the fallout will be to the bigger banks that are fully entrenched in the status quo system. Smaller banks that rely on innovation for their survival are leading the way in this crypto revolution where a new way of doing business is quickly emerging.