Swiss bank UBS decided to lay out initial plans to offer investment products in cryptocurrencies to wealthy clients.
By virtue of this decision, UBS joins American companies in seeking to achieve wider access to this category of assets in response to customer requests, related to cryptocurrencies.
Sources familiar with the plan revealed that the Swiss bank is exploring several options to provide this class of assets. They said that any investment product will result in a very small share of the client’s total wealth due to the volatile nature of the asset.
The options include third-party investment entities, the sources said.
As more global securities trading companies started to provide cryptocurrency services, Goldman Sachs Group delivers deeper into the market. The bank non-deliverable forwards, a derivative tied to Bitcoin’s price that pays out in cash.
As for Morgan Stanley, it plans to give wealthy clients access to three funds that can own cryptocurrencies. Bank of New York Mellon Corp is developing a platform for trading traditional and cryptocurrencies. Citigroup is also studying providing cryptocurrency services.
“We are monitoring the developments in the field of digital assets closely,” UBS said in a statement. “Importantly, we are most interested in the technology which underpins digital assets, namely the distributed ledger technology.”
Bitcoin remains the largest cryptocurrency, but the increased momentum in other currencies is attracting more attention. Advocates have argued that investors feel more comfortable investing in a variety of currencies, while critics say the market may be in a bubble.
UPS is afraid of losing customers if it does not offer investment products of this kind to wealthy clients, according to the sources.
Local rival Julius Baer Group’s CEO Philipp Rickenbacher said last week at a conference that the wealth manager was looking at working with partners to offer clients access to crypto assets, though for now doesn’t plan to execute its own Bitcoin-related transactions.
UBS Chief Executive Officer Ralph Hamers is taking a deep look at where he can both cut costs and digitize operations, including the high-touch business of serving the world’s wealthiest.
Hammers changes the way the bank spends on technology projects, assigning it quarterly allocations instead of fixed annual funding.
The bank spends about $3.5 billion annually on technology, maintaining and modernizing existing infrastructure, creating new tools for employees, and new products for customers.