Former UBS Chief Says Blockchain Technology is Beneficial to the Financial Sector
The former President of Swiss bank, UBS AG, Peter Wuffli, who now serves as the director of the cryptocurrency bank, Sygnum AG, recently shared his thoughts on the potentials of cryptocurrency and blockchain technology. In an interview with SwissInfo on September 26, 2019, the new Sygnum Director believes that blockchain technology is a tremendous advantage to the financial sector.
Blockchain Technology is an Important Tool for Financial Institutions
Peter Wuffli, who worked as the CEO of Switzerland’s largest bank for six years stated that one of the reasons why he paid attention to the cryptocurrency and blockchain sector, was because of the opportunities that existed within the nascent industry
The Sygnum Director added:
“I was hooked because I saw how this idea was mobilising resources of finance and talent. It reminded me a bit of the experience 20 years ago when some of our best equity traders set up a hedge fund. It felt like a similar opportunity, where innovation meets talent.”
Also speaking the importance of blockchain technology, Wuffli said that transparency was a key component of DLT. The Sygnum Director further stated that the use of blockchain provided a cheaper, efficient, and reliable alternative for financial services. Distributed ledger technology (DLT) effectively reduced cumbersome processes, eliminated intermediaries and reduced risks.
Wuffli also opined that blockchain as an accounting system made sure that transactions were correct and traceable, with all operations controlled through a consensus. In Wuffli’s opinion, “this is better than a hierarchical chain of bureaucratic controls. I find that powerful.”
The Sygnum director earlier stated that the cryptocurrency industry brought innovation that would help to improve the Swiss financial market. However, Wuffli noted that the risks associated with the dynamic industry affected the entry of institutional investors.
Capitalizing on the Cryptocurrency Market
Speaking on the opportunities that existed for cryptocurrency banks like Sygnum AG, Wuffli said:
“The most immediate opportunity is the existing $220 billion market of institutions and private individuals who already own cryptocurrencies. Thousands of clients have contacted us for a one-stop shop for asset custody, loans and trading cryptocurrencies seamlessly with fiat currencies.”
Apart from leveraging on the cryptocurrency market, tokenized assets like real estate, company shares, commodities, or art were the next major thing for cryptocurrency bank. However, regulatory concerns need to be addressed, which may take a few years.
Sygnum AG, along with SEBA Crypto AG, were granted conditional banking and securities dealers’ license in August 2018. This was a first of its kind coming from the Swiss regulatory body, FINMA.
Commenting on the license, Wuffli stated that it showed the seriousness of the crypto-focused bank and also how FINMA was open to enabling the development of the Swiss financial industry.
Wuffli also spoke about Facebook’s cryptocurrency, Libra, stating that no country would allow a private currency like Libra threaten their monopoly on currencies. French Finance Minister, Bruno Le Maire, has expressed concerns about Libra replacing sovereign currencies. Facebook’s David Marcus later came out to debunk such claims.