UBS Considers Providing Crypto Investments to Rich Purchasers


  • Swiss financial institution UBS is reportedly within the “early phases” of plans to supply crypto investments to its rich shoppers.
  • Past cryptocurrencies, UBS is exploring using distributed ledger know-how to digitize operations.

UBS Group, Switzerland’s largest personal financial institution, is planning to supply cryptocurrency investments to its rich prospects, based on a BNN Bloomberg report citing unnamed sources conversant in the matter.

The plan continues to be in its early phases, however any providing would reportedly characterize solely a small portion of a shopper’s portfolio, with a view to hedge in opposition to cryptocurrencies’ worth volatility. One supply stated that doable choices may embrace third-party funding automobiles.

In keeping with UBS, the financial institution is “monitoring the developments within the subject of digital belongings carefully,” looking for to supply its shoppers broader entry to cryptocurrencies in response to hovering demand.

Nonetheless, the Swiss monetary behemoth has careworn that blockchain as an underlying know-how is prime of its priorities.

“Importantly, we’re most within the know-how which underpins digital belongings, particularly the distributed ledger know-how,” UBS stated in an announcement.

Ralph Hamers, CEO of UBS, is reportedly exploring doable avenues for slicing prices and digitizing the financial institution’s operations. UBS, which holds $1.1 trillion in belongings below administration, already spends as a lot as $3.5 billion annually on technological enhancements geared toward sustaining and modernizing its present infrastructure. Nonetheless, it feels there’s a necessity for extra progressive instruments, together with blockchain and synthetic intelligence.

It’s not the primary foray into the world of blockchain for UBS. Final 12 months, the Swiss financial institution joined Barclays and a dozen of the world’s different largest monetary establishments to collaborate on a challenge–subsequently delayed till later in 2021–that might create digital variations of the US greenback, Canadian greenback, British pound, Japanese yen, and the Euro. Earlier this 12 months, UBS participated in a $65 million funding spherical for Brooklyn-based Ethereum firm ConsenSys (which funds an editorially-independent Decrypt).

The financial institution has beforehand solid doubt on the viability of cryptocurrencies as an funding. In a September 2020 report, printed when Bitcoin was buying and selling simply above $10,000, UBS argued that Bitcoin was an unattractive safe-haven funding, as a result of its vulnerability to cost swings.

“Given their excessive volatility and the scale of the previous drawdowns, cryptocurrencies is likely to be engaging to speculative traders, however they’re neither an acceptable various to safe-haven belongings, nor do they essentially contribute to portfolio diversification,” stated the report.

Since then, the worth of the benchmark cryptocurrency has risen sixfold, hitting an all-time excessive above $63,000 in April 2021.

Huge banks flip to Bitcoin

Had been UBS to supply crypto investments to its shoppers, it will be part of the ranks of a number of different giant monetary establishments already working with digital belongings, or planning to take action.

Earlier this month, Goldman Sachs stated its rich shoppers would quickly get entry to Bitcoin non-deliverable forwards, or short-term futures contracts rewarding traders who can predict the long run worth of the asset.

In the meantime, Morgan Stanley has provided its wealth administration shoppers entry to Bitcoin funds from March this 12 months. The funding financial institution considers cryptocurrency appropriate for folks with “an aggressive threat tolerance.”

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