Swiss bank PostFinance set to provide crypto services to customers

Despite the turbulent crypto winter that has shrouded the market with a thick veil of uncertainty and doubt, there is still good news coming from the cryptocurrency space, proving once again that digital assets are much more resilient than expected. The number of organizations and institutions adopting crypto has been increasing steadily over the past few years, and now Swiss government-backed bank PostFinance has just announced it’s ready to join their ranks. 

The adoption of cryptocurrency by financial institutions facilitates access to a variety of crypto trading and custody services, allowing people to buy bitcoin with credit card, store their digital assets safely or sell them if they so wish. This represents a big step forward for crypto enthusiasts and the industry as a whole, especially considering that PostFinance is Switzerland’s fifth-largest financial services provider. 

Switzerland’s approach to crypto

The Swiss bank which is entirely owned by the government has plans to provide its 2.5 million customers access to crypto services, namely buying, storing and selling Bitcoin (BTC) and Ether (ETH), the two largest cryptos on the market at the moment. This is just the first step toward greater crypto adoption as the bank plans to expand its offering by gradually including other crypto tokens in the future. 

The integration of crypto services within the traditional banking system has been made possible by PostFinance’s partnership with Sygnum Bank, a reputable digital asset service provider that was granted a banking license by Swiss regulators four years back. Since then, Sygnum has collaborated with various other institutions that have decided to incorporate crypto services. 

PostFinance’s branching out into crypto is a thoroughly calculated move motivated by a series of factors. As Philipp Merkt, PostFinance’s Chief Investment Officer, explained, the decision comes as a response to the rising interest in cryptocurrency from bank customers. He also mentioned that working with an experienced and recognized provider like Sygnum Bank played a very important role in the entire process.  

Fritz Jost, Chief B2B Officer at Sygnum Bank also addressed the decision, adding that the increasing outflows from Swiss retail banks into crypto assets have also encouraged this initiative. So, for PostFinance adding crypto to the range of services they provide is as much motivated by the opportunity to develop a new revenue stream as it is by the desire to ensure client retention. 

Crypto adoption across the world 

Although many Swiss institutions believe crypto adoption to be the next logical step in the development of their services, not all countries share this perspective. In other parts of the world, digital currencies don’t enjoy the same level of acceptance as they do in Switzerland. Probably the most relevant example in this respect is provided by China. In September 2021, the People's Bank of China (PBOC) imposed a drastic measure by banning all crypto transactions. PBOC explained that the ban’s purpose was to curtail financial crime and reduce the risk of economic instability in the country. 

China is not the only country where digital currencies are not legally accepted as part of the financial system. Algeria has made selling, buying and holding virtual currencies illegal since 2018, while other countries like Bangladesh, Bolivia, Colombia, Egypt or Indonesia are not on good terms with crypto usage either.  

At the other end of the spectrum are the countries that have decided to accept crypto as legal tender. The same month that China imposed a ban on crypto, El Salvador became the first country to accept Bitcoin as a legal tender, requesting businesses to accept it as a payment method. The following year, the Central African Republic took the same approach and became the second country to make Bitcoin a legal tender. 

Other countries like the US, Canada, France, Germany and Spain are not opposed to crypto usage but are currently working on regulating the cryptocurrency space as a way to reduce risks by protecting investors and ensuring financial stability. 

The case for crypto adoption

Despite their rising popularity, digital assets remain a relatively novel technology, so it’s understandable that governments and businesses are not exactly eager to jump on the bandwagon without thinking this decision through. However, if cryptocurrencies didn’t provide any real benefits, they wouldn’t have survived for so long in the harsh financial environment. So, for anyone who’s still doubting crypto’s potential, let’s look at a few reasons why further adoption of digital currencies could be a great idea.

For starters, crypto is already making huge waves in the financial system, with the number of users increasing steadily over the years. According to the latest data, there are approximately 420 million crypto users worldwide, so it’s pretty obvious that people are growing more interested in digital currencies, and this rising interest also grows the demand for crypto services. For any institution or business looking to meet customers’ needs, embracing crypto makes perfect sense.  

Cryptos have proven time and time again that they’re here to stay. Neither the numerous bear markets nor the bans imposed by certain regulatory bodies or the risk associated with crypto usage have been able to stop the expansion of the crypto industry. Digital currencies have proven to be a very resilient asset class, so chances are they’re going to gain more ground in the years to come. If this happens, early adopters will be better positioned than crypto skeptics to address the demands in the market. 

Then there are the inherent benefits that crypto provides for institutions, businesses and users. Digital assets ensure fast and cheap transactions, without the need for a third party to oversee the process. They’re also extremely safe, being secured by cryptography which makes them immune to forgery or double-spending. On top of it, crypto allows users to maintain their anonymity, while also ensuring greater financial inclusion.  

All in all, whether it happens sooner or later, crypto adoption seems to be inevitable. So, preparing for a future where crypto becomes mainstream doesn’t sound like such an outlandish idea.