UBS CEO Endorses Blockchain Technology as FINMA approves Swiss Crypto Fund AG

Regulation 2 min, 3 sec READ

by Tom Nyarunda

UBS Investments seems to be wary of blockchain's decentralization while still aware of the need to adapt to survive in financial services.

Sergio Ermotti, CEO of Swiss investment bank and financial services provider UBS Group AG, has given blockchain technology a thumbs-up. Ermotti argued that blockchain is "almost a must-have" for the financial services industry.  

Ermotti told CNBC he believes the technology that supports cryptocurrencies has the potential to help businesses free up resources and enhance efficiency in reducing operational costs. He predicted that blockchain’s real potential in the industry will come alive in ten years’ time. 

Our industry will continue to be under pressure, in terms of gross margins. It's no doubt. The only way you can stay relevant is not only by being strong in terms of capital, in terms of products, the quality of the people you have, advice you give to clients. You need also to be able to price it correctly. -Sergio Ermotti 

UBS appreciates blockchain’s potential use for its business but its leadership is skeptical about cryptocurrencies. Group chairman Axel Weber called earlier this month for tighter controls on cryptocurrencies; he believes they are not transparent.      

Crypto Finance AG Granted FINMA License

In a related twist in Swiss crypto news, the FINMA (Swiss Financial Market Supervisory Authority) has granted financial technology group Crypto Finance AG a license to distribute collective investment schemes and gains to qualified investors. The fund, created earlier this year, represents the largest crypto assets base and provides crypto investment advice to its members. The founder and CEO of the first Swiss group to receive this authorization had this to say about their achievement:  

 For us, getting the FINMA license is a big step in the right direction, to establish us as the first point of contact for crypto assets. - Jan Brzezek

Prior to launching Crypto Finance AG to expedite the implementation of blockchain technology via high-quality financial services, Brzezek worked as a derivatives expert at UBS and was vocal about Switzerland’s standing in the crypto-verse, advocating for clearly-defined regulations. The license allows the fund, which was launched overseas, to set up a base at home. 

Ermotti’s sentiments regarding blockchain and cryptocurrency exemplify how banking authorities fear the decentralization of finance promised by the new technology, while also recognizing the need to adapt or fall behind.