Swiss banks remain wary of bitcoin

by James · February 17, 2023

Is Credit Suisse’s investment in digital asset platform Taurus the moment Crypto Nation Switzerland has been waiting for? It looks more like a case of blockchain “Yes”, bitcoin “No”.

This content was published on 17 February 2023 – 15:44

Switzerland’s second largest bank is the lead investor in a $65 million (CHF60 million) Series B round in Taurus, which specializes in crypto financing.

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The Geneva-based Taurus offers services to store and manage cryptocurrencies and issue stablecoins, a type of cryptocurrency backed by more traditional assets.

But this doesn’t mean Credit Suisse is ready to dive into bitcoin. The bank is more interested in Taurus’ other business – creating blockchain-compatible versions of the company’s shares and other securities.

This means creating digital versions of securities that are stored and transferred on DLT systems (Distributed Ledger Technology). The hope is that DLT will make it faster, more cost-effective and transparent to create and trade shares and bonds.

DLT interest is spreading

Credit Suisse follows a path already trodden by other traditional financial players, such as the Swiss stock exchange and other banks.

Taurus has a proven track record of tokenizing company shares. It recently helped Swiss private bank Cité Gestion achieve this feat with its own shares.

The Swiss companies Metaco, Daura and Aktionariat are also very much in the same game.

The term digital assets these days can encompass a whole range of elements: from cryptocurrencies to digital securities and DLT tokens representing art and real estate.

Decentralized vs centralized

Credit Suisse’s foray into digital assets is a far cry from the libertarian values of bitcoin and other public blockchains that strive to move away from centralized gatekeepers, such as banks.

Very few Swiss banks are willing to jump on the bitcoin bandwagon, especially after the collapse of crypto exchange FTX last year. “Like many banks, we are still conservative,” Credit Suisse Switzerland CEO André Helfenstein told the Handelszeitung newspaper.

The centralized and decentralized paths of digital assets are locked in a tug-of-war for the future of finance.

It is quite possible that both systems can prevail, running in parallel, depending on consumer demand and the exact goal of their operations.