Sarah Tran
Independent Analyst
- UBS Group is in the early stages of planning to offer cryptocurrency investments to its wealthy clients.
- The Swiss banking giant joins a handful of US firms looking to offer broader access to digital assets as demand soars.
- Looking beyond the new asset class, the bank is exploring the use of distributed ledger technology to digitize operations.
UBS is looking to offer its wealthiest clients to invest a small percentage of their net worth in cryptocurrencies.
UBS explores ways of exposure to cryptocurrencies
UBS is exploring several alternatives for offering crypto-related products to its rich clients in response to client demand. According to an unnamed source, the Swiss multinational bank is concerned that it may lose its clients if it does not start to offer investments related to the new asset class to its wealthy clients.
With $3.5 trillion in assets under management, the banking giant is only offering digital asset investments that represent a small portion of a client's portfolio to hedge against price volatility, which could include using third-party investment vehicles.
UBS has been closely keeping an eye on the field of digital currencies. The bank said in a statement:
We are monitoring the developments in the field of digital assets closely. Importantly, we are most interested in the technology which underpins digital assets, namely distributed ledger technology.
UBS CEO Ralph Hamers is also exploring the use of artificial intelligence to sell products to the wealthy and changing the way the bank spends on technology-related projects.
Crypto demand from wealthy clients continues to grow
Swiss private bank Julius Baer Group is also seeking to offer clients access to cryptocurrencies. However, it has no plans to execute any Bitcoin-related transactions.
The Switzerland-headquartered banks would not be the first large institutions to offer products related to the new asset class.
Morgan Stanley became the first big US bank to offer its wealthy clients access to Bitcoin funds from Galaxy Digital. The investment bank considers the new asset class suitable for people with “an aggressive risk tolerance.” Goldman Sachs recently also launched Bitcoin non-deliverable forwards for its institutional clients and reopened its crypto trading desk earlier this year.
Alongside Morgan Stanley and Goldman Sachs, Citi Group is also considering taking its first steps in the $2.5 trillion crypto market due to a surge in client interest.
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