Zurich Cantonal Bank (ZKB), Switzerland’s fourth-largest bank with assets totaling around 200 billion Swiss francs ($235 billion), has announced the launch of Bitcoin and Ethereum trading and custody services for its customers. Beginning September 4, 2024, ZKB clients will be able to trade BTC and ETH directly through the bank’s eBanking and Mobile Banking platforms.
Crypto custody refers to the secure storage and management of cryptocurrency private keys on behalf of investors. Private keys are crucial alphanumeric codes that grant access to cryptocurrencies held in digital wallets, and crypto custody providers focus on safeguarding these keys to protect the underlying crypto assets from theft or loss.
One of the primary features of crypto custody is secure storage, which involves a combination of hot (online) and cold (offline) storage methods. This approach mitigates the risks associated with online hacks and theft, ensuring that assets remain protected.
Additionally, crypto custody services help institutional investors meet regulatory requirements by allowing them to store client assets with qualified custodians, thereby facilitating wider adoption of cryptocurrencies.
To execute crypto trades, ZKB has partnered with Crypto Finance AG, a subsidiary of Deutsche Börse Group. Additionally, the bank will handle the secure storage of private keys for its clients, eliminating the need for customers to manage their own wallets.
This new offering is seamlessly integrated into ZKB’s existing digital platforms, allowing clients to access cryptocurrency markets with the same ease as managing traditional bank accounts.
ZKB’s move is part of a broader trend of Swiss financial institutions exploring the potential of cryptocurrencies and blockchain technology. In June 2024, Sygnum Bank extended its crypto services to over 20 entities, including PostFinance, ZugerKB, and LuzernerKB, making cryptocurrency markets accessible to a significant portion of the Swiss population.
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Furthermore, ZKB’s entry into the crypto space is not limited to its own clients. The bank is also offering a business-to-business solution that enables other Swiss banks to provide crypto trading and custody services. Thurgauer Kantonalbank has become the first partner bank to adopt this service.
The crypto custody market has experienced rapid growth as institutional adoption of digital assets has accelerated. For instance, assets under custody grew from $32 billion in January 2019 to $223 billion by January 2022. Looking ahead, crypto custody is expected to play a pivotal role in enabling the mainstream adoption of cryptocurrencies and blockchain technology.
As more institutional investors enter the space, the demand for secure and regulated custody solutions is likely to continue rising, underscoring the importance of this sector in the evolving financial landscape.
