Why the ‘Crypto Winter’ means Summer for SEBA

February 13, 2019

The prolonged duration of the distressed cryptocurrency and alt-coin markets may be cause for concern for some, but not for SEBA. Although the market capitalization of the crypto economy is half what it was in September 2018, the market’s average daily trading volume has steadily increased, and so our business model remains on course, and we fully expect to achieve the conservative market penetration reflected in our business plan. In fact, we believe the upside for SEBA is more positive than ever. Whereas before 2017, the market was fundamentally about speculation, what is now clear is the cryptocurrency ‘hype’ phase is behind us, and distributed ledger technology is moving into a period of measurable value creation.

Blockchain technology, through tokenization, enables more efficient and better service across the spectrum of the financial services value chain. We are only now beginning to realize the impact that tokenization will have on the global economy. Everything is going to be digitized into a token – everything of any value – money, data, physical assets, so that ownership can be shared and liquidity released, non-bankable assets will all be able to become bankable. Even your identity will become bankable. Within the realm of Corporate Finance, Security Token Offerings (STOs) have innovated a much more effective format and regulated entities such as SIX Digital Exchange are developing digital exchanges to trade these assets. The landscape is rapidly maturing.

Blockchain enables frictionless transfer of asset ownership, in a way that is making clearing, settlement and reconciliation services nearly obsolete, hence opening the markets to more participants than ever before. Also, a tokenized asset is the ideal collateral, and so we expect to see a direct correlation between asset tokenization and the availability of tokenized-asset backed lending, resulting in efficiencies for both the borrower and the lender.

SEBA has applied for a Banking & Securities Dealers license from FINMA. Subject to receiving such a license, we will have a broad base of capabilities to offer the market. We believe that SEBA will be uniquely positioned to take a market-leading position in this era of value creation. We are unique in the breadth of the license we hope to obtain, and the depth of the Custody Storage capability we would be bringing to market. We would be able to offer transaction banking services to the crypto corporate population whose growth is encumbered by traditional banks, and we would be able to offer Custody Storage solutions to institutional investors, enabling them to enter the emerging asset class with a regulated partner. These two capabilities, transaction banking and custody storage, would form a wide base from which the rest of our future service offering can flourish. We are here to enable the last mile in the crypto economy, to make real the many ideas that are spawning from this nascent technology.

Whereas in the beginning the focus was mainly on Bitcoin and the revolution seemed only about ‘digital money’, at SEBA, we’ve been saying all along that it’s about more than just money. The tokenization of assets is the real breakthrough, and thus crypto-currencies as such, while still playing an important role, are losing relevance in the bigger scheme of the digital asset market transformation. From our perspective, the Crypto Winter only served to validate SEBA’s underlying business model and go-to-market strategy.

For more information about the SEBA roadmap, download The SEBA Vision