Sergio Ermotti, the CEO of the multinational financial giant UBS which is based in Switzerland, said in an interview with CNBC that blockchain technology is “definitely an opportunity” in the long term, and it’s “almost a must” for a financial company like UBS to explore and implement blockchain technology.
Ermotti believes blockchain to be as “crucial and disruptive” as regulations were a decade ago, saying blockchain technology reduces costs since it is more efficient than older versions of financial technology. The savings generated by blockchain technology could give UBS an edge over other institutions; he says UBS is under pressure as always to keep service costs down to stay relevant.
UBS is the 11th largest bank in Europe with USD 3.2 trillion of assets in its custody and a market cap of USD 64.5 billion, and annual profits of USD 7.7 billion. USD 2.8 trillion of the assets it holds for clients are investments. UBS has a high level of brand loyalty due to its huge amount of capital, security, and reputation for discretion.
Indeed, UBS is known as a haven for storing money offshore to avoid taxes. It is perhaps no surprise that it is looking into and using cryptographically secure blockchain technology considering its reputation. UBS has been under investigation by Israel, the United States, France, Germany, and Belgium for facilitating tax avoidance. Therefore, it is crucial for UBS to keep its operations completely secure and encrypted to avoid international meddling, and cryptographic blockchain technology can provide that security.
UBS is already using blockchain technology for financial services by partnering with computer giant IBM to create Batavia, which has successfully facilitated cross-border transactions between corporations using blockchain smart contracts.
It is positive news for the blockchain community that UBS, one of the largest banks in the world, is using blockchain technology and its CEO is speaking so positively about it. This is another sign that blockchain technology is becoming integral to the global financial system.
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