Category Archives: Credit Suisse

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Credit Suisse Successfully Tests Blockchain for Cross-Border Payments

Investment Bank Credit Suisse Successfully Tests Blockchain for Cross-Border Payments

Swiss multinational investment bank and financial service company Credit Suisse confirmed today that its asset management arm which manages over USD 400 billion has successfully tested a blockchain-based cross-border transaction, as reported by Reuters.

According to the post, parties involved in the test — Portugal’s online bank Banco Best and Luxembourg-based order-routing platform Fundsquare — confirmed that a blockchain-based platform was used “to process an unspecified number of trades”.

The attestation stated that the test showed cross-border payment processing which was distributed over the blockchain and is more efficient, scalable and timely in processing.

According to the source, “the investment fund industry relies heavily on transactions and settlements that are often complex and time-consuming to process”, hence the need for a transition to a more secure and fast system to scale up processes.

As it stands, blockchain much-cited edge as a distributed immutable ledger becomes the preferred choice under the circumstances. The post also notes that because of the quality of the blockchain, fewer checks are needed to ensure entries are secure, which in turns saves time.

While the test was successful, the parent company made no comments on whether future applications of the technology will be expanded.

For banks and many financial institutions, optimizing cross border payment processes through blockchain is increasingly becoming an important use case of the blockchain.

Last December, UK fund processor Calastone said it could save up USD 4.3 billion using blockchain and would be moving its operations by May this year.

Recently, major Swiss exchange SIX said it was ready to launch its SDX trading platform using blockchain.

Saudi and UAE have reportedly been collaborating to develop a cross border payment system basically designed for bank-to-bank transactions only through the blockchain, and currently, have a select few commercial banks participating.

 

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Eleven Credit Suisse Staff Take Crypto Positions Elsewhere

Zurich’s branch of Credit Suisse has seen an exodus of staff, as they switch from banking to cryptocurrency over the past year.

The last to leave, Andrew Reel, has left the Swiss bank to become head of digital asset markets at Morgan Stanley also based in Zurich. But he’s just the tip of the iceberg when it comes to crypto defectors, with insider reports from the Swiss banking giant stating that 11 others have also departed on the digital career trail.

Three others have left CS bound for various positions at Crypto Finance, a Swiss company that aims to implement blockchain technology, and one to become head of trading. Two others have left the bank and set up Vision&, a self-described “Swiss-based, SRO-regulated asset manager facilitating access to innovative blockchain investment opportunities.” Since then, these two have reportedly launched the first actively managed blockchain investment product in Switzerland.

A crypto exchange in Zug, Switzerland’s Crypto Valley, called Lykke, has been the beneficiary of another Credit Suisse defector, which later saw the arrival of two further CS refugees. Two other companies have also snapped up leavers such as blockchain company Digital Asset and Schneider Digital Asset.

Apparently, all professionals in the Zurich banking market are well known to each other and it appears that they’ve all ended up at Credit Suisse at some time or another. One of the leavers commented:

“We all worked together on the trading floor…The community in Switzerland (and globally) was very compact a couple years ago. Our small blockchain cell of people entered the space rather early and shared knowledge.”

Reportedly its that fact the cryptocurrency and blockchain lend themselves to a better way of expressing the entrepreneurial spirit than banking. He added, “We found different ways to enter the crypto business but still keep close and exchange thoughts.”

Switzerland’s stock exchange, SIX, announced recently that it will open its doors to digital currencies. The new platform which is being built by SIX will offer integrated post-transaction services such as deal settlement and asset custody through DLT. SIX and regulated by Finma. The Swiss Central Bank, says that it plans to roll out its cryptocurrency service in the first half of 2019.

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Zug: The Swiss Model of a Crypto Friendly Society

The small town of Zug just outside of Zurich with a population of under 30,000 has become known as Europe’s crypto haven as the region embraces increasingly decentralized model, writes Business Insider.

Multinationals have been attracted to the town with its low 14% cooperation tax and it now attracts pharmaceutical and medical companies such as Shire, AstraZeneca, and Johnson & Johnson.

The town is a home for Crypto Valley Labs, a coworking space for Switzerland’s many start-ups which was opened at the beginning of the year with 40 paying members. Startup members often use the space when in town rather than work permanently from there. The Labs are due to expand soon, taking in another two-floors due to swelling business.

A spokesperson for Shapeshift, a fintech company based in the town, was attracted to Zug back in 2014 due to its crypto friendly position at a time when governments were generally anti-crypto due to the Mt Cox collapse and the Dark Net Bitcoin connection:

“We knew that crypto was a very new thing and various regulators might view it in different ways,” he said. “We wanted to find an environment where we thought it would generally be friendly. We identified Zug, and Switzerland in general, as a place that was open to this type of innovation… “

Such views are shared by many exchanges and companies now based in Zug, but it is commonly accepted that Nikolas Nikolajsen of Credit Suisse was a main driver of Zug becoming the crypto friendly space that it has become today.

Danish-born Nikolajsen, who set up the crypto service company Bitcoin Suisse in 2013, is regarded as the town’s cryptocurrency pioneer. Current BS CEO Arthur Vayloyan maintains that “Many knowledgeable people today know their thing because they were privileged to have [Niklas] as an initiator.”

“The whole starting point was the Ethereum Foundation,” Oliver Bussmann, president of the Crypto Valley Association, told Business Insider. “They decided to set up the foundation here and that triggered the set up of a new ecosystem — law firms, tax, accounting, smart contract evolvement firms, startups, universities.”

The Crypto Valley Association was set up at the beginning of 2017 to bring all of Zug’s crypto parties in tandem, forming the name from the topography surrounding the town combined with California tech centre, Silicon Valley.

Both Shapeshift and Bitcoin Suisse were in agreement, suggesting that the Swiss model should replicated everywhere,  as Vayloyan put it:

“Zug is definitely a great place to do business because you have this network, you have the government who supports it. You sense it, you sense that there is support in the crypto sphere. They are playing it very well.”

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Banker Moves from Wall Street to Advertising ICOs

A former employee of Credit Suisse Group AG, Brian Wirtz, has left his investment banking job on Wall Street to pursue a venture in ICO startups.

As reported by Bloomberg, Wirtz exited the Swiss bank after nearly five years of employment, hoping to now promote the issuing of security tokens in particular during his new advertising pursuit.

Exiting Wall Street

Wirtz’s LinkedIn profile described his role at Credit Suisse as an “investment banker focused on helping crypto core teams achieve their strategic missions”. He previously worked as the head of blockchain advisory at the bank, describing his role here as “director [of] blockchain, crypto assets [and] investment banking”.

In a video accessible on the Credit Suisse website, Wirtz discusses his working history in relation to the cryptocurrency industry. After becoming engaged with Bitcoin in 2012, he took his newfound interest with him when he began work at Credit Suisse in 2013. Credit Suisse is currently investing in blockchain technology, as is JPMorgan Chase.

During his time at Credit Suisse, Wirtz spent six months pursuing a Bitcoin mining company on behalf of the bank, but his endeavor never came to fruition. He spent significant time advising companies on how best they could invest in blockchain technology.

Credit Suisse has a history of indirectly promoting the cryptocurrency market, previously hosting cryptocurrency conferences for institutional investors in the US. The conferences tend to get a lot of media traction, influencing the industry in a positive direction.

Wirtz is now allegedly looking to begin a project advertising security token ICOs, which should build confidence with ICO issuers currently operating in a tenuous regulatory climate. He is experienced in dealing with regulated securities, lending arguably much-needed compliance know-how to the industry.

It is reported that Wirtz left Credit Suisse because he was unable to accomplish his cryptocurrency goals while operating under a major investment bank. Credit Suisse CEO Tidjane Thiam has never openly come out in favor of cryptocurrencies.

 

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