Switzerland’s Fifth-Largest Bank Set to Launch Crypto Services

PostFinance, a government-owned retail bank and financial services unit of the Swiss Post, has partnered with digital asset bank Sygnum to provide crypto trading and custody services to customers. 

PostFinance Partners With Sygnum Bank to Launch Crypto Trading and Custody Service

According to an announcement made on April 5, the collaboration between both banks will allow PostFinance’s over 2.5 million customers to buy, store, and sell major cryptocurrencies, including Bitcoin (BTC) and Ether (ETH), through Sygnum Bank’s institutional business-to-business (B2B) solution.

Sygnum’s B2B network, which comprises more than 15 banking partners, gives financial institutions access to regulatory-compliant digital assets and supports a wide range of crypto tokens. The network also facilitates passive income-generating services like crypto staking. 

Sygnum claims to be a fully regulated “digital asset specialist” with a Swiss banking license and one of the few banks in the world that can provide a secure bridge between traditional finance (TradFi) and decentralized finance (DeFi) sectors.

Founded in 1906, PostFinance is the fifth-largest retail banking institution in the country. The fully-owned subsidiary of Swiss Post is well-known for its pro-crypto stance. 

Swiss Post’s Foray into Digital Asset Industry 

In 2021, PostFinance partnered with Swissquote, an online trading platform, to develop the ‘Yuh’, a mobile app that allows the bank’s customers and other users to get access to traditional shares, stock markets, and over 25 different cryptocurrencies.

Last July, the bank teased plans to launch an in-house crypto trading and custody platform. The bank assured customers Yuh will remain operational while the Sygnum-powered platform will be its primary and independent digital asset offering. 

In November 2021, SwissPost launched the “Swiss crypto stamp”, a 175,000-piece non-fungible token (NFT) collection linked to 13 physical stamps issued by the postal service.

Holders of the digital collectables minted on the Polygon blockchain can exchange or sell them on secondary NFT marketplaces such as OpenSea. According to Swiss Post, there will be 65,000 copies of the most common digital stamp design, while only 50 pieces of the rarest items in the collection will be available. 

Last month, Swiss Post announced the launch of Crypto Stamp version 3.0, a new iteration of the digital and physical stamp collection powered by artificial intelligence technology. The NFTs are scheduled to go on sale on May 2, 2023. 

According to Philipp Merkt, the chief investment officer of PostFinance, there is growing demand from the bank’s customers to incorporate digital assets into its services. He added that crypto assets have become an integral part of the financial world and customers wanted to access the market through “their trusted principal bank”. 

Fritz Jost, Sygnum Bank’s chief B2B officer, said partner banks can integrate the graphical user interface (GUI) solution of Sygnum’s Plug-n-Play B2B network within 60 days while allowing their clients to access the crypto bank’s entire suite of digital asset products and services. 

Speaking to Cointelegraph, the B2B chief added that, unlike Sygnum’s other banking partners, PostFinance’s deployment involves using the B2B network’s API to natively integrate digital asset custody, trading, and market data information directly into its e-banking service. 

Fritz claims that PostFinance’s foray into the digital asset market and its decision to launch an independent crypto trading service can be linked to the recent turmoil in the traditional banking sector that saw many customers move their funds from retail banks into crypto assets. 

According to the Sygnum chief, PostFinance became well aware of the situation that was unfolding where hundreds of millions of dollars were outflowing from banks to crypto institutions like exchanges every year. Hence, it became a necessity for the bank, and an opportunity presented itself to add a new revenue stream in crypto that was mainly aimed at client retention. 

Late last month, Credit Suisse, one of the largest and oldest banks in Switzerland, collapsed after facing a liquidity crisis.

The Swiss government quickly got involved and brokered a deal with UBS, another Swiss banking giant, to purchase Credit Suisse’s assets for $3.2 billion. The bank’s failure was sped up by the implosion of Silicon Valley Bank and Signature Bank in the United States.