Swiss asset manager Julius Baer eyes crypto and DeFi potential

The 132-year-old Swiss asset management firm, Julius Baer, intends to offer exposure to cryptocurrencies and decentralized finance (DeFi) for its high net-worth clients.

The firm’s CEO Philipp Rickenbacher confirmed the move into the cryptocurrency space during his delivery of the company’s strategy update for the next three years.

Rickenbacher noted that the recent slump in the cryptocurrency markets presented a watershed moment for its clients to gain exposure to the nascent asset class.

“It could well be at this very instant that we are witnessing a bubble-burst moment of the crypto-industry and we all know what happened after the dot-com bubble burst 30 years ago. It paved the way for the emergence of a new sector that indeed transformed our lives.”

Rickenbacher drew parallels with the two sectors, noting that cryptocurrencies and DeFi hold the same potential as the Dot Com bubble, which birthed the internet and various core services that we now know and use.

“They will transform the financial sector over the next ten years and it is important for us to gain a strong foothold in this area. That’s why it's exactly the right moment to invest in the long-term potential of digital asset technology.”

The CEO highlighted the work being undertaken by various central banks to create central bank digital currencies (CBDCs) as well as the popularity of cryptocurrency exchanges accelerating regulation and creating a playing field with the world of traditional finance.

Rickenbacher was particularly enamored with the potential of the DeFi sector — which has in recent weeks been under the spotlight given the calamitous collapse of the Terra ecosystem.

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The Julius Baer CEO believes the space has seen untamed innovation clash with regulatory reality. While some critics are not sold on the potential of DeFi, Rickenbacher believes the space will heavily influence the future of finance:

“On the other hand, it's also where traditional, cost-heavy and complex parts of the old banking system are today just rewritten with a few lines of code. As technology and traditional finance ultimately will converge, there is huge potential to really transform our value chains.”

The firm will begin to offer advice and research on the cryptocurrency space to its clients while providing access to the space by integrating cryptocurrencies into its wealth management offerings.

Julius Baer also intends to partner with cryptocurrency service providers and entrepreneurs at the intersection between fiat and crypto while ensuring regulatory compliance for its clients.