Sberbank announces it is prepared to offer cryptocurrency investment services for savvy investors (in Switzerland)

Liquidity glut pushes investors looking for returns in the crypto-world

Herman Gref was not mincing his words when last year he pushed his lieutenants to seriously study the effects of the crypto-world — and learn on why the exchange rate for so many currencies were increasing by the second — and tasked them with the strategy of commercialising the wave.

The opportunity seemed so close — and both so distant as the essence of a virtual currency being openly available to Russian retail customers were not to the liking of the regulator, so several times this has been announced an illegal surrogate and penalised, but the allure of 1000%+ returns oozed the ears of savvy premium customers, so for them Sberbank was willing to make an exception. Having over 100 000 euros with Sberbank Switzerland made one a qualified investor, for whom certain possibilities like trading CFDs, having better leverage for exotic trades are available — and so the bank has today announced it is preparing the infrastructure to offer crypto custodial service and trading to legal entities and then to private customers.

The bank has taking advantage of the Zug environment and relying on the clause for legal entities to hold balance in crypto-assets.

As to the rationale, when researching this at some point of time last year, the answers given by a partner of a audacious VC fund, Digital Space Ventures, went like this:

The why and how:

The interesting part to learn of the forces driving crypto were in comparing the spike in search volumes corresponding to popular protests and liquidity crises in default-risk countries — and then propagating to countries with plateauing economic growth and reinforced capital control regimes — like China, where middle class took every chance it could to convert their savings into either P2P loans offered through various platforms, then into distributed shares in real-estate and finally in crypto.

The problem for crypto still unsolved is whether the capital controls and the liquidity are good enough to allow this asset to be widely available, with all the risks explained to the end users, as the tokens rationale is changed from being a medium of exchange (it is painfully inefficient for that) to a store of value (a digital gold).

Whatever the goals for the Sberbank experiment are, one has to be always mindful of the drawback.