Credit Suisse rescue plan may include nationalization, bondholder losses

March 19, 2023 Coin Telegraph

Banks

A bank rescue plan for Credit Suisse may impose losses on its bondholders and even result in a full or partial nationalization of Credit Suisse Group AG.

A rescue plan for Swiss banking giant Credit Suisse may impose losses on its bondholders and even result in a full or partial nationalization of Credit Suisse Group AG, multiple reports revealed on March 19.

Swiss authorities are considering applying losses to Credit Suisse bondholders as part of the bank's ongoing recovery efforts, Reuters learned from two sources. European regulators are concerned that the move might undermine investor confidence in Europe's financial sector.

Another report from Bloomberg claims that the Swiss government is analyzing a full or partial nationalization of the bank, the only available alternative if the UBS takeover is not completed. Investment bank UBS is Switzerland’s largest bank.

Can anyone else remember seeing European bank CDS and bonds quoted on a Sunday before? Very surreal!
— Robert Smith (@BondHack) March 19, 2023

On March 18, the Swiss National Bank (SNB) and Switzerland’s financial regulator said Credit Suisse's acquisition by UBS is the “only option” to prevent a “collapse in confidence” in Credit Suisse.

The nationalization would be an emergency option due to the complexities surrounding the deal and the limited time available. Swiss authorities are working over the weekend on "emergency measures" to accelerate the deal before Asian markets open, including allowing the deal to proceed without a shareholder vote.

UBS is reportedly asking the government to shoulder around $6 billion on legal costs and potential future losses in the event of a takeover. UBS is offering $1 billion for Credit Suisse, a considerable discount under the bank's market value on March 17 of nearly $8 billion, according to Companies Market Cap.

*Market capitalization history of Credit Suisse, 2001-2023. Source: Companies Market Cap*

Swiss authorities are also concerned about job losses due to the deal. According to reports, Credit Suisse was previously considering laying off 9,000 employees to save its business.

Investment company BlackRock denied on March 18 plans or interest in acquiring Credit Suisse. "BlackRock is not participating in any plans to acquire all or any part of Credit Suisse, and has no interest in doing so," the firm said on Twitter.

Swiss Bankers Association proposes deposit tokens to develop digital economy

March 16, 2023 Coin Telegraph

Coin Telegraph

A deposit token is a concept that came out of Singapore’s Project Guardian last year, and it has already been touted by JPMorgan.

The Swiss Bankers Association released a white paper on how Swiss banks can support the development of the country’s digital economy. A Swiss franc “joint” deposit token is the solution the group settled on.

Stablecoins have limited penetration in the Swiss financial system, even as end-to-end digitization is becoming more common in business models, and no Swiss stablecoins are accessible by the general public, the paper says.

The authors of the paper suggest a variety of stablecoins — that is, a deposit token “issued by regulated and adequately supervised intermediaries” — issued and redeemed by smart contracts and denominated in Swiss francs. The token could be designed as a ledger-based security, rather than a set of instructions, to provide it with the greatest potential.

The paper identifies three design options for a deposit token: Standardized tokens that any commercial bank can issue with a uniform standard, colored tokens that are issued by commercial banks to any standards they choose, and joint tokens that are issued by a licensed and supervised special purpose vehicle consisting of participating banks. The authors prefer the last choice.

*Comparison of digital forms of money. Source: SBA*

A joint deposit token would facilitate money creation due to its flexibility, have low fees and could earn interest when held in bank accounts. It would be less liable to runs than tokens issued by individual banks. Furthermore:

“From a technical standpoint, all the economic and legal requirements that have been identified can be met. […] In principle, the DT should operate on a public blockchain with additional protocols to ensure sufficient privacy and transaction efficiency.”

The token would ideally be a layer-2 solution usable in decentralized finance (DeFi) applications and capable of self-custody or bank custody.

The Swiss Bankers Association (SBA) has published a white paper on a digital Swiss franc, in which it outlines various designs of tokenised deposits on the blockchain https://t.co/SsPwziNRRm
— Central Bank Payments News (@cbpaymentsnews) March 14, 2023

Deposit tokens are a relative newcomer to the ranks of digital currencies. According to a recent overview in The Washington Post, they originated in Project Guardian, an initiative the Monetary Authority of Singapore launched with several financial institutions in May 2022 that sought to explore DeFi applications in wholesale funding markets.

JPMorgan, one of the participants in Project Guardian, executed the first DeFi trade on a public blockchain as part of that project. JPMorgan and project participant Oliver Wyman released a paper discussing the merits of deposit token technology in February.

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Bitcoin Suisse explains why Swiss is a crypto pivot point: Davos 2023

January 19, 2023 Coin Telegraph

Coin Telegraph

Bitcoin Suisse CEO emphasizes importance of "Swiss quality" and "safe custody for crypto industry."

Switzerland is a “pivot point” for crypto adoption in Europe and continues to be the “center point of the next stage of institutionalization," said Dr. Dirk Klee, CEO of Bitcoin Suisse.

The CEO divulged why Switzerland is still the top spot for crypto in Europe and will continue to attract institutional investors in an exclusive Cointelegraph interview streetside in Davos, Switzerland.

We have boots on the ground in Davos! Our reporter @gazza_jenks speaks to Dr. Dirk Klee, CEO of @BitcoinSuisseAG about Switzerland and the adoption of cryptocurrency at the @wef. #CTWEF23 pic.twitter.com/ka00dvWpVz
— Cointelegraph (@Cointelegraph) January 18, 2023

In discussion with Cointelegraph reporter Gareth Jenkinson, Klee explained:

“A lot of trust has been destroyed and eroded in the last year and we want to be kind of the center point of the next stage of institutionalization, you know, making the place more accessible, easier to use, but also safer.”

Founded in 2013, Bitcoin Suisse is one of the oldest Bitcoin (BTC) and crypto companies specializing in asset storage, including “custody solutions deep in the Swiss mountains,” stated Klee.

Switzerland is a well-known safe haven for crypto in Europe. The landlocked country is recognized for its role in the inception of Ethereum (ETH), and is home to Crypto Valley — a favorable environment for blockchain and cryptocurrency companies.

Switzerland is known for "Crypto Valley," in the canton of Zug.

Switzerland also boasts the Bitcoin and crypto-friendly city of Lugano, which hosts an annual Bitcoin conference and has even onboarded McDonald's into accepting Bitcoin Lightning.

However, even in Switzerland, crypto confidence took a knock in 2022, particularly in light of the FTX debacle and its contagion effects across crypto: “It’s a setback for the industry. It has destroyed a lot of trusts and–you know–has also left a lot of investors harmed,” Klee explained.

In such an environment it’s useful to hark back to historic Swiss values. Switzerland is still a “safe safe place to do business."

“The Swiss finish, the Swiss quality is a narrative and is a quality sign that this industry needs because–you know–you need to have a trusted place.”

Thousands of crypto enthusiasts have flocked to the crypto and blockchain events at the World Economic Forum. Hosted at the seat of the Alps, in the Davos ski resort, it appears the overarching bear market has not disturbed the Swiss charm.

Ripple CEO: XRP lawsuit resolved by June, SEC conduct ’embarrassing’

January 19, 2023 Coin Telegraph

Brad Garlinghouse

Ripple CEO Brad Garlinghouse said the firm's XRP lawsuit could come to an end within "single-digit months."

Ripple CEO Brad Garlinghouse expects the firm’s long-running dispute with the Securities Exchange Commission (SEC) will be finalized within “single-digit months” and remains confident in securing a favorable outcome.

Speaking to CNBC on Jan. 18 at the World Economic Forum in Davos, Switzerland, Garlinghouse said the verdict could come as soon as June this year now that both parties have “fully filled and fully briefed” their arguments before the U.S. District Court:

“We expect a decision from a judge certainly in 2023. You don’t really have control over when a judge makes their decisions. But I’m optimistic that sometime in the coming single digit months we’ll have closure there.”

While Garlinghouse and investors believe the facts, law and the court will ultimately side with Ripple, the Ripple CEO also took the opportunity to ridicule the SEC’s “embarrassing” behavior displayed throughout the lawsuit, noting:

“The SEC’s behavior in some of it has been embarrassing as a U.S. citizen. Just some of the things that have been happening, like you’ve got to be kidding."

Garlinghouse also argued the firm was betrayed by the regulator, as it filed the lawsuit despite their efforts to meet with them on three separate occasions seeking regulatory clarity:

“Not once did they say to me we think XRP may be a security. So to later go back and say hey the whole time we thought XRP was a security we just didn’t tell you… that doesn’t feel like a genuine partnership between public sector and private sector.”

While noting that the outcome of the case also has huge implications for the cryptocurrency industry, Garlinghouse reiterated that Ripple would only settle if it was made clear that XRP is not a security.

However, “the SEC and Gary Gensler has very outwardly said he views almost all crypto as a security” Garlinghouse said, “so that leaves very little space in the Venn diagram for settlement,” he added.

*Garlinghouse speaking with CNBC at the World Economic Forum in Davos, Switzerland. Source:* *CNBC.*

Garlinghouse added that the U.S. SEC should take note from some of the more crypto-friendly countries who are piecing together more “positive” regulation that doesn’t stifle innovation.

Among the countries he spoke highly of included the the United Arab Emirates, Japan, Singapore, Switzerland and the U.K.

The lawsuit was initiated by the SEC in December 2020, claiming that Ripple illegally sold its XRP token as an unregistered security.

Ripple has long disputed the claim, arguing that it doesn’t constitute an investment contract under the Howey test.

Should the two sides fail to settle, the New York-based District Court will either make a standalone ruling or put the matter before a jury in a trial.

The Netherlands tops new survey as the most metaverse-ready country

December 14, 2022 Coin Telegraph

Coin Telegraph

A new study by Uswitch revealed which countries are ready to embrace the metaverse by more technical standards, such as fixed broadband speeds and prices.

The metaverse and digital reality experiences are barreling toward consumers, whether they are ready or not. However, there are certain places in the world that are more ready to embrace a digital future from a technological standpoint.

A new study by Uswitch, an internet and telephone service researcher, looked at a combination of fixed broadband speeds, broadband package prices, the number of blockchain financial start-ups and the price of high technology exports to determine which countries have the capacity to embrace the metaverse.

At the top of the list is the Netherlands, with the most hospitable conditions to cater to such technology. According to the study, the Netherlands has one of the highest average fixed broadband speeds of 106.51Mbps. The country also produced roughly $6,000 of high-technology exports per capita last year.

The Netherlands also ranked number one in metaverse interest from a consumer standpoint, according to a different survey.

Following the Netherlands are Switzerland, Lithuania, Malta and France. All countries in the top five spaces are known for showing interest in the emerging Web3 space. Malta has been particularly a longtime crypto and blockchain hub.

The United Kingdom and the United States, two major players in the metaverse development space came in 7th and 12th respectively.

Despite recent turbulence in the Web3 space, development surrounding the metaverse continues to push forward.

Recently, Animoca Brands announced that it is taking a majority stake in a new music metaverse gaming platform. This came shortly after the company announced its plans for a billion-dollar metaverse development fund.

Meta, the Facebook parent company, is also back in the metaverse spotlight after co-founder and CEO Mark Zuckerberg said he’s not letting criticism and significant monetary losses stop plans for building a metaverse platform.

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Switzerland

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