The state of wealth is increasingly digital. Not only in wealth management, from online investment portals to the ever-reliable Bloomberg terminal, but also in the assets themselves, writes Marc Taverner in an article for finews.first.
Some call it "modern" wealth, others call it "digital wealth," but they reflect the same reality: An increasing proportion of successful and profitable portfolios include digital assets. Also known as crypto assets and cryptocurrencies, they are often well recognized for their specific asset classes: Bitcoin, Ethereum, USDC, Tether, and more.
When crypto assets arrived, buying them directly was the first and only way to have them in a wallet. Faced with the complexity of opening a cryptocurrency wallet or finding an OTC provider with the proper license in their jurisdiction, many smart investors stayed out of the market and waited for it to mature.
“Whether digital or physical, investors want assets in European banks”
As prices rose, financial products began to appear (or at least be proposed). While much attention is paid to the status of even more US ETF applications (against its ever-stubborn Securities and Exchange Commission), Europe is already decades ahead. Europe is already home to several products designed specifically for private investors, family offices and even pension funds looking to diversify into crypto assets.
This reflects the clear leadership of our continent in the regulation and management of digital wealth. Although Europe faces competition from other jurisdictions such as the United Arab Emirates, Hong Kong and Singapore, demand for European-licensed products persists.
Whether digital or physical, investors want assets held in European banks. In many cases, they go a step further: they want their assets and products (not to mention their financial service providers) to be Swiss licensed and regulated. Switzerland has become a model for regulated and licensed cryptoasset investment. While not part of the EU, its approach represents what the EU might interpret as an ideal outcome when implementing MiCA.
“It is not surprising that the companies driving the digitalization of investments are based in Switzerland”
Switzerland's approach is particularly interesting given that it is not part of the EU, but is subject to the Swiss Financial Market Supervisory Authority (Finma). Having worked in several other jurisdictions, Finma is unique in that it has fostered a healthy, properly regulated and self-regulating environment that makes it possible for responsible actors to create financial products in crypto assets.
It is no surprise that the companies driving the digitalization of investments are based in Switzerland. One of them has launched a platform to create actively managed certificates, including for Bitcoin, shortening the time to launch from years to weeks. This allows authorized providers like us to create avenues for investing in crypto assets that do not exist in other markets. This follows continental interest in products like Fidelity's Bitcoin ETP.
Originally launched in Frankfurt, it is also based on the SIX exchange in Zurich. Not to mention the foresight of prominent Swiss private banks, whose early adoption of crypto assets and leadership solidified Switzerland's place as the top jurisdiction for digital wealth.
«After the approval of the MiCA, all eyes are now on its execution»
With the guidance of Finma and the healthy ecosystem of licensed crypto asset providers, investors here in Switzerland are well equipped to explore digital wealth. Furthermore, as Swiss regulators have provided an official framework in which companies, service providers and exchanges can legally operate, investors have more confidence to interact with these asset classes and products without fear. In fact, we founded our company, XEROF, here. We couldn't have started anywhere else than in Switzerland.
Following the approval of MiCA, all eyes are now on its execution. And if Europe wants to show the world what regulated cryptoasset markets are like, then Switzerland will be its star student. Its approach to permitted investments in these digital assets sets a standard that countries across Europe can aspire to if they want their citizens' investments in crypto assets to remain regulated and protected.
Mark Taverner is the CEO and co-founder of CRAZY, a leading Swiss financial services provider specializing in crypto assets and offering institutional services in digital and fiat currencies, including cross-border settlement, currency exchange, OTC brokerage, asset custody, and frictionless payments. Founded in 2020. Most recently, Tavernier led INATBA, one of the largest multi-stakeholder blockchain trade associations backed by the European Commission and the Abu Dhabi Global Marketplace, where he oversaw all aspects of political engagement and government relations in through huge regulatory breakthroughs like MiCA. He was also part of the management team at Bitfury, one of Europe's first unicorn cryptoasset companies.
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