Swiss Startup Raises Over $100 Million To Create Hybrid Cryptocurrency And Fiat Bank

September 27, 2018 9:42 PM

SEBA Crypto AG, a startup led by ex-managers of Swiss investment bank UBS, has raised over $100 million to create a bank that will offer both cryptocurrency and traditional banking services to blockchain and cryptocurrency startups.

Based in Switzerland’s “Crypto Valley,” a thriving hub for FinTech and cryptocurrency firms and a very early welcoming climate for such startups, SEBA Crypto AG has raised funds from institutional and private investors, including Black River Asset Management and Summer Capital.

The startup aims to become one of the first regulated banks to allow fiat and cryptocurrency trading, feature cryptocurrency investment services, and provide traditional banking services to cryptocurrency and blockchain firms. It will also offer corporate financing and advice on initial coin offerings (ICOs) and other banking services.

Currently, some cryptocurrency companies are finding it difficult to access traditional banking services, leaving a niche for startups like SEBA Crypto AG to support these new companies.

A Brazilian watchdog agency, for example, is currently investigating the country’s largest banks for monopolistic practices of restricting cryptocurrency firms by refusing traditional banking services. In France, a new ICO framework specifically protects the rights of authorized cryptocurrency companies to access traditional banking services in order to better serve cryptocurrency investors.

SEBA Crypto AG has applied for a banking and securities dealer license from the Swiss Financial Market Supervisory Authority (FINMA). Reuters has confirmed with FINMA that it is in talks with SEBA about the license application process.

The project’s leading managers, boasting their traditional banking experience with UBS, are chief executive Guido Buehler and chairman Andreas Amschwand. Buehler has said, “SEBA wants to bridge the gap between traditional banking and the new world of crypto,” adding that the ambition of SEBA Crypto AG is to “become a market leader in the convergence of traditional finance with the crypto economy.”

Buehler has also confirmed that some of the 100 million Swiss francs (around $103 million dollars) will be used to create the bank, with the remainder as capital for the bank to offer investment protection.

The aspiring bank also plans to expand to Singapore and wider Europe and to raise additional funding once the license from FINMA is granted.

Amschwand says the commitment of Switzerland to “establish a comprehensive regulatory environment” for blockchain and crypto assets makes the country the “ideal place to launch a new financial services paradigm.” He also commented, according to Bloomberg reporting, that the current cryptocurrency market fluctuations and price decline is not affecting his view: “Short-term volatility does not undermine long-term validity of digital assets.”

The occasional aversion of traditional banks to what is viewed as the riskier and unregulated cryptocurrency sector has created an opportunity for new FinTech startups like SEBA Crypto AG. If it successfully receives a banking license, the new bank will provide much-needed regulated banking services to the cryptocurrency and blockchain industry. It may also be another step toward the integration of traditional banking with the new economy of digital assets. 

Melanie Kramer is a freelance FinTech, blockchain, and cryptocurrency writer based between France and Canada. Melanie has studied, and retains an avid interest in, global politics, business, and economics.

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