Falcon Swiss private bank, which handles around $15 billion in assets, announced yesterday they are now allowing their clients to “exchange and hold Bitcoins via Falcon using their cash holdings,” according to a statement.
The bank has entered into a partnership with Bitcoin Suisse AG, a crypto-assets broker, and has been given the green light by FINMA, the Swiss banking regulator.
“We are proud to be the first-mover in the Swiss private banking area to provide blockchain asset management for our clients. Falcon is convinced that the time is right to enter this nascent market and it is our firm belief that this new product will fulfil our clients’ future needs,” Arthur Vayloyan, Global Head for Products & Services at Falcon, said.
The bank says they provide financial services to private clients and wealthy families from their offices in Zurich, Abu Dhabi, Dubai, London and Luxembourg.
Moreover, although they are Swiss in heritage, they are owned by Aabar Investments, whose parent company is wholly owned by the Government of Abu Dhabi.
Some may see a bank offering bitcoin services as an ironic twist of sorts. Not least because many have taken the headline in bitcoin’s genesis block, which says Chancellor on brink of a second bank bail out, as suggesting bitcoin was to disrupt banks.
However, as bitcoin has not yet found wide, every-day, acceptance, the pipelines between bitcoin and fiat have developed into central points of sorts, with most bitcoiners uncomfortable in holding the asset directly, leaving it instead on exchanges.
Exchanges, or banks, can then operate as fractional reserves or worse, as shown by the case of MT Gox. Then, when everyone tries to withdraw, they collapse, bringing us full circle.
Some say the need for banks is temporary and necessary as the currency moves to wider acceptance, but in the case of bitcoin specifically, many of its developers have said the currency is not for buying every-day things, which means it’s not a currency at all, but gold which you just hold.
They are further planning to add other layers and intermediaries on top, so the currency may move in a very different direction from how it was envisioned.
A vision which may have moved to ethereum as the fairly new currency plans to considerably scale without adding any needed intermediaries.
However, like bitcoin, as the currency gains wider use and acceptance, more and more banks are likely to offer the service of directly buying or holding eth with them.
The difference is, you’d have the choice of simply keeping it in your own wallet and the freedom to directly send it to anyone through the blockchain. While for bitcoin, soon, you’ll have to go through hubs, which may simply deny you the service or withhold your funds for some time.