Forty eight percent of Swiss banks are planning or already conducting tokenization use cases, according to a survey conducted by the University of St. Gallen, mintminds and vision&. The figure for embracing cryptocurrencies is far higher at 64%. Beyond tokenization and crypto, 58% of banks have plans for other ‘advanced’ blockchain use cases such as trade finance or settlement.
The consensus amongst the 19 banks that took part in the survey is that the potential for blockchain will be achieved in a two to five year timeframe, with a higher impact beyond the five year mark. However, beyond the five year mark, only 37% of bankers believe the impact of DLT will be significant, compared to 63% who view its importance as moderate. In the next two years, 11% of banks (both private banks) believe the impact will be significant
Just over a quarter of banks have ten or more full time staff dedicated to digital assets. Another 21% have two to five staff.
The interest in tokenization seems to have increased since last year when Swiss regulator FINMA surveyed 34 institutions. It found that crypto trading and custody dominated, with tokenization far behind.
Tokenization challenges
When asked about the challenges of tokenization, some of the responses were concerning. More than half (53%) said the business was not prioritizing tokenization or that it lacked a business case. The second biggest challenge was a lack of know how, with the third concern being a lack of customer interest. Issues often discussed amongst experts ranked quite far down the list, with 11% citing high costs and 5% mentioning a lack of secondary trading and the same number pointing to the need for standards.
Regarding their own levels of expertise, the majority consider themselves beginners in both crypto (60%) and tokenization (58%). For tokenization, only 8% view themselves as experts compared to 20% for cryptocurrency. The remaining group believes they have a limited level of experience.
Banks are also allocating some of their portfolios to cryptocurrencies, which represent just over half of one percent in assets under management. A few other notable statistics are that Swissquote, one of Switzerland’s largest brokers, generated 11% of sales through crypto in the first half of 2024. Since 2019, PostFinance has transferred more than CHF 1 billion to crypto exchanges.
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