Päivi Rekonen, SEBA Bank’s chairwoman Seba Bank Less than half-an-hour’s train ride from Zurich, in the center of the picturesque town of Zug, there’s a centuries-old building with a frescoed facade, ancient timber ceilings and pastel window shutters.
This former town hall would make a welcome stop for any tour group exploring Switzerland’s rich architectural heritage. Yet everyone walking in and out of its imposing entrance is wearing formal attire. A futuristic logo sits atop the door – it reads ‘SEBA BANK’ – and a solitary symbol, ‘₿’, peers through the window to Zug’s cobbled paving.
You might think that a steel and glass skyscraper would be a more fitting choice for the headquarters of Switzerland’s first regulated crypto bank. But SEBA’s founders chose these premises for a reason.
It was here, in 2016, that Zug’s local government became the first municipality in the world to accept taxes in bitcoin – and the new tenants are no less determined to bridge the traditional economy with the new digital one.
Päivi Rekonen, SEBA’s chairwoman, is the kind of fintech leader that nonagenarian investors like Warren Buffett and Charlie Munger simply won’t acknowledge the existence of – steeped in banking experience, fiendishly clever, and convinced beyond any doubt that bitcoin and blockchain technology are reshaping the global financial system.
“We are still, in my view, in the early days of this new industry, this digital assets universe,” Rekonen, who’s held senior positions at a Rolodex of technology and financial giants – Nokia, Cisco, Credit Suisse and UBS – tells me in an interview in SEBA’s plush office.
“The institutional money, and also the professional investors, they have woken up to the reality that market values have skyrocketed – in DeFi (Decentralized Finance), in NFTs (Non-Fungible Tokens), in cryptocurrencies. The data is beginning to show that this is happening, this is absolutely happening … And if you look at the size of the institutional money bucket, we are just at the beginning. I think we’re at the beginning of an entire industry.”
SEBA was founded in 2018 by Guido Bühler, Sébastien Mérillat and Guido Rudolphi.
In 2019, it received a banking and securities dealer license from FINMA, the Swiss Financial Market Supervisory Authority, becoming the joint-first regulated bank anywhere in the world to specialize solely in digital assets. The other licensee was Zurich-based Sygnum. More regulatory approvals have flowed in, including the right to provide institutional-grade digital asset custody to collective investment schemes – another first.
German-speaking Zug was a natural choice for a base of operations; not just because of the local government’s enthusiasm for bitcoin, but also the growing number of blockchain companies that had set up shop in the small town, widely dubbed the “Crypto Valley” of Switzerland (although other municipalities such as Italian-speaking Lugano and French-speaking Neuchâtel are now giving it a run for its money ). The Ethereum Foundation – a non-profit organization that promotes the world’s second largest cryptocurrency – was established in Zug in 2014. Today, about half of Switzerland’s 1,000 or so crypto start-ups call the town home.
“It was important for us to be in a location where we have access to talent,” Rekonen says. “You want to be somewhere the employees also want to be – somewhere with likeminded companies, institutions, associations – so that you can learn and you can grow. I think SEBA chose the right place to be.”
She adds, however, that for any new technology: “When innovations are born, there’s often also resistance.” Cryptocurrencies in general and bitcoin in particular continue to be perceived, wrongly, as Ponzi schemes and tools for money laundering by a sizable chunk of the global population. Many governments and regulators – albeit not Switzerland’s – eye the sector with deep suspicion, fearing its potential to disrupt financial markets and intentionally laying down hurdles for investors. Building trust
“So,” Rekonen says, “you need to start thinking about how do you build trust with the communities that you’re serving, with the clients that you want to attract?”
The answer – according to Swiss politicians, anyhow – is regulation. The country’s Federal Council, its highest executive body, enacted ten legislative amendments last year, updating the law to spell out how cryptoassets should be handled by regulated entities when it comes to custodying, securitizing, complying with Anti-Money Laundering (AML) rules and more. Combined with the steady stream of licenses being issued by FINMA, this blanket ordinance gives legal certainty to the new class of institutional investors gingerly dipping their toes in the market.
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source The World’s First Regulated Crypto Bank Braces For Flood Of Institutional Money
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