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Why banks are needed

3 min read

Founded in mid-2018, the financial institution has made it its mission from the outset to represent a philosophy of next-generation digital banking. We spoke exclusively with Matthew Alexander, Head Digital Corporate Finance & Asset Tokenization at the SEBA Bank talked about CBDCs (digital central bank currencies), the role of banks in the crypto economy and the strengths of Switzerland as a crypto location in Europe.

Why banks are needed in the crypto world

Banks are part of the old world of finance. Nobody will need them in a world of DeFi, BTC and Co. At least something similar is often heard from the crypto world. Or as Microsoft founder Bill Gates once put it: “Banking is necessary, banks are not.” But have banks really lost their raison d’être? Alexander emphasizes that the banks can build an important bridging function between the traditional financial system and the new world:

I think the general public struggles to take advantage of many of the offerings in the DeFi world. Even Metamask wallets are still pretty scary for the average customer because you have to know what you are doing and there is no real safety net. The technology itself is extremely robust and extremely transparent. But again, if you don’t know what you’re doing, it’s easy to make a mistake. So I think that this kind of protection can be provided by banks for those who are less familiar with the subject.

Matthew Alexander

First experiments with CBDCs

A project from 2020/2021 shows how far SEBA Bank has come in terms of crypto. Together with the French central bank (Banque de France), the first CBDC experiments were carried out and the Results subsequently published. Here, the Banque de France simulated the issuance of a CBDC on a public blockchain, maintaining the control and confidentiality of transactions based on the development and deployment of a dedicated smart contract. According to the French central bank, the experience gained should be an important part of the contribution to the ECB’s deliberations on the advantages of CBDCs. We wanted to know from Alexander whether he shares the sometimes very skeptical attitude of many in crypto space:

Having worked with teams at Banque de France for a long time, I realized that they are absolutely focused on security, privacy and efficiency and they are aware of GDPR data protection and the impact that digital technologies like blockchain can have. and the associated transparency, are very aware.

Matthew Alexander

In addition, we asked when to expect a first central bank currency. Alexander is optimistic here, but emphasizes that it could take some time as there are still some legal and regulatory hurdles to be overcome.

So I think this is going to take a while. But I don’t think it’s a question of whether they [die Notenbanken] will do it or how they will do it. I think it’s just a matter of timing.

Matthew Alexander

Crypto location Switzerland

SEBA Bank is headquartered in Zug, Switzerland. This is in the middle of the so-called Crypto Valley. However, this designation is by no means exaggerated when you look at all the well-known projects that have settled in the municipality on Lake Zug. The headquarters of the ETH Foundation in train. Also the Web3 Foundation has settled in the small Swiss town.

So we wanted to know: what makes this place so special for crypto companies? The SEBA manager emphasizes that the DLT law, which was passed in Switzerland last year, had a significant impact on Switzerland’s attractiveness. Since then, fintech and blockchain companies in Switzerland have had a sufficient legal basis for the so-called “tokenization” of securities.

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All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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