The Big Whale: BBVA Switzerland is one of the most active banks on crypto topics in Europe. What is your vision of this market?
Philippe Meyer: I would divide the market in two with cryptos on one side, i.e. bitcoin, ether and other cryptos, and digital assets on the other with everything that will revolve around tokens.
As far as cryptos are concerned, we can clearly see that the Bear Market is over. The markets have picked up again even though there can be sharp falls, as we have seen in recent days with bitcoin at less than $60,000.
The arrival of ETFs in the United States has completely changed the game. Bitcoin and ether are recognised as legitimate assets by the SEC, which is the main financial jurisdiction on the planet, so it's a gigantic change.
Even though these ETFs are not yet sold outside the US, it all adds credibility to the sector.
Things are not yet completely clear on ether...
Yes, you're right, but the Ethereum Spot ETF filings have been validated and the SEC just needs to give the go-ahead for them to be marketed.
With regard to tokens, we're clearly seeing an institutionalisation of the sector. The question is no longer whether to position oneself, but how. We have moved into an operational area.
What JP Morgan and BlackRock are doing in the US or banks like BBVA in Europe is a glaring example. We're no longer looking for the area where Web3 can provide a solution, it's providing solutions, and we need to make use of them.
At precisely what level?
Passing through blockchain makes things easier both in the execution of operations and the availability of products.
It's also very interesting in the area of payments and transactions. For a bank, it's more efficient to switch to a blockchain than to have each of our legs in a different payment network.
In recent months, the realisation that cryptos and tokenisation bring real value has been taking hold. These technologies are nibbling away at areas of business and they will gradually replace traditional financial infrastructure.
When we listen to you, we think that the main issue is infrastructure. Is this really the case?
The infrastructure dimension is fundamental. Many assets are going to be tokenised, particularly those that already exist such as shares, real estate, wine and so many others.
In their current form, many assets are complicated to manage and trade, whereas with tokenisation it's more efficient and even simpler to distribute.
What's in it for your customers?
Beyond the new assets that are cryptos like Bitcoin, which I'd put a bit aside as a store of value, all digital assets are new products or give access to products, and that's what our customers are interested in.
Why do we have such an impression that adoption is lagging?
It's not an impression, adoption is indeed lagging, and the explanation is quite simple to understand: the financial players don't know how to market and commercialise these products well.
Many banks have tested products, but each time they have done so by isolating the digital assets, which means that the user experience is not good. Customers have to create special accounts and use dedicated applications. The experience cannot be conclusive.
There is a real issue of integrating crypto products into the traditional customer channel. Buying bitcoin, ether or USDC should be something commonplace in the customer's life.
It's a very Web3 view to think that customers absolutely want something dedicated to digital assets. What matters to them is their wealth and its value.
BBVA Switzerland's blockchain business is a business like any other, whereas some banks like Société Générale have decided to isolate their blockchain activities. What do you think is the best strategy?
We have created a dedicated unit for which I am responsible, but we rely on the IT team, compliance, legal, risk, in short all the bank's traditional activities to manage and push the crypto activities. Everything is diffuse, we are not a vertical unit.
How do your customers buy cryptos?
Our customers can buy crypto directly from BBVA Switzerland. At the moment, only bitcoin and ether are available, but we are going to include other assets, particularly the larger ones such as Solana.
I don't think we are going to add that much more because we also have to do this sorting work for customers.
Why do we do this sorting?
There is a reputational risk. We can't associate our name with assets that could disappear tomorrow.
The other point is that today most of our customers' demand is still on Bitcoin, Ethereum and precisely Solana and a few cryptos. For our customers, cryptos are still a subject for diversification, so they don't need access to hundreds of cryptos.
To serve customers properly, you need to have in-house skills. Do you have these skills? If so, what are they?
We have experts in the field. In-house, for example, we have experts in staking and new crypto trends.
Has offering cryptos, enabled you to expand attract new customers?
Yes, very clearly, even if that's not the main objective.
Of your 3,000 customers, how many are interested in cryptos?
Out of 3,000 customers, we have 900 wallets, of which around 400 are really active, which represents around 15% of our customers.
There are now crypto players such as Exchanges or even crypto banks that provide access to these products. Are they competitors for you?
We are not in competition with these players. Whether it's the Exchanges or crypto banks like Sygnum or Amina, we see them as complementary players.
How do you manage the custody of cryptos?
For the custody part, we work with Metaco. We have two types of client. Institutional clients, who each have their own segregated account, and an omnibus account for retail clients. The Swiss regulator accepts this system for retail clients.
All this activity is managed off-balance sheet, so it's client funds that we're not allowed to touch. It's perfectly secure for customers. The only difference with the omnibus account is that the fund allocation table is in our banking system instead of on the blockchain.
Is the takeover of Metaco by the American company Ripple not a problem?
No, at least not for the moment.
Today you are accelerating more and more on crypto subjects. Is this because customer demand is increasing or because you want to get ahead of the game?
When we started working on cryptos in 2018, it wasn't related to customer demand. It was really the will of management, who said we had to look at the subject and be present.
A few years later, this strategy has paid off because we are present and we are enabling our clients to position themselves in assets that offer a significant return.
The financial world is changing fast and it's important to be ahead of emerging subjects like digital assets. This is what will ensure that we remain a leading bank.
