Swiss Banks Embracing Tokenization and Cryptocurrencies: Survey Results and Challenges Ahead

Swiss Banks Embracing Tokenization and Cryptocurrencies, Survey Finds

A recent survey conducted by the University of St. Gallen, mintminds, and vision& has revealed that nearly half of Swiss banks are either planning or already conducting tokenization use cases. The survey, which included 19 banks, also found that 64% of banks are embracing cryptocurrencies, showing a growing interest in digital assets within the Swiss banking sector.

In addition to tokenization and cryptocurrencies, 58% of banks have plans for other advanced blockchain use cases such as trade finance or settlement. The consensus among the surveyed banks is that the potential for blockchain will be realized within the next two to five years, with a higher impact expected beyond that timeframe.

However, beyond the five-year mark, only 37% of bankers believe the impact of Distributed Ledger Technology (DLT) will be significant, compared to 63% who view its importance as moderate. In the next two years, 11% of banks, particularly private banks, believe the impact will be significant.

The survey also revealed that just over a quarter of banks have ten or more full-time staff dedicated to digital assets, with another 21% having two to five staff members. This indicates a significant investment in digital asset capabilities within Swiss banks.

Interestingly, the interest in tokenization has increased since a previous survey conducted by Swiss regulator FINMA, which found that crypto trading and custody dominated, with tokenization lagging behind.

When asked about the challenges of tokenization, respondents cited a lack of prioritization or a business case as the biggest challenge, followed by a lack of know-how and customer interest. Despite these challenges, banks are beginning to allocate some of their portfolios to cryptocurrencies, with digital assets representing just over half of one percent in assets under management.

Notable statistics from the survey include Swissquote generating 11% of sales through crypto in the first half of 2024, and PostFinance transferring more than CHF 1 billion to crypto exchanges since 2019. Overall, the survey highlights the increasing interest and investment in tokenization and cryptocurrencies within the Swiss banking sector.