Asset Management

AllianceBlock Driving DeFi Understanding In Swiss Crypto Heartland

Jackie Bennion Deputy Editor 10 December 2021

AllianceBlock Driving DeFi Understanding In Swiss Crypto Heartland

Diplomacy and networking opportunities are ramping up to bring decentralised finance solutions into plain sight. Zug is one hive of activity.

As the crypto market and the infrastructure developing around it continues to rub up against regulators, Swiss-based AllianceBlock has announced that it is joining the Open Wealth Association. The firm says the move is to help bridge the divide for Swiss banks and wealth managers keen for more access to the emerging decentralised banking environment.  

AllianceBlock is among the first DeFi businesses (short for decentralised finance) chosen to join the association, which has been the preserve of traditional financial institutions such as Credit Suisse, LGT, and VP Bank.

As the name suggests, the Open Wealth Association has set its sights on developing Application Programming Interface (API) standards that lie at the heart of open banking, which are increasingly being sort by global wealth managers looking for more seamless financial information sharing.

AllianceBlock says membership into the circle of Switzerland’s “most connected top-tier banking and traditional finance institutions" underscores the growing institutional interest in DeFi and a desire for DeFi players to have a seat at the table.

AllianceBlock tools and services include an NFT lending platform for illiquid assets, such as art, collectables and illiquid funds, and a decentralised investing platform for investors and start-ups.

The drumbeat of the sector is to speed up adoption and understanding of DeFi technologies and work in step rather than against regulators and banks in support of finding a sweet spot for integration.

“One of the greatest challenges to widespread adoption and integration of DeFi is a lack of understanding,” AllianceBlock CEO and founder Rachid Ajaja, said. “In joining the Open Wealth Association, AllianceBlock is opening its door to other members, where we will both lend our expertise and learn from those working at the forefront of change within the global financial system.” He said that the firm is “well-poised” to educate a new network of institutional players about DeFi’s ability to reshape financing. He added that the goal is to make it more open, streamlined, and cost-effective.

In recent months, AllianceBlock has consolidated in Switzerland, opening a new office in Zug. The firm joined the Crypto Valley Association, which has attracted a cluster of blockchain businesses to Zug, about an hour outside Zurich’s banking hub.

The Ethereum Foundation set up camp in the town several years ago, drawing in a supporting network of law firms, tax specialists and accounting firms, and those organising smart contracts on the blockchain.

Jurisdictions globally are vying for supremacy in the DeFi and crypto space. Singapore, Switzerland, Liechtenstein, Malta, and New York are some of the centres throwing regulators and practitioners into rooms to hash out clear and credible compliance regimes in order for these “efficiency driven” technologies to thrive. There are plenty of detractors, and regulators are working at different speeds as they decide where decentralised finance and traditional finance can coexist.

Private market momentum
The latest temperature check from Valk suggests that institutional investors are steadily adopting DeFi solutions to fully leverage their crypto and digital assets holdings. A recent survey of institutional investors across eight major jurisdictions by the platform provider found that roughly a third (30 per cent) of those investing in digital assets currently are using decentralized finance platforms, with two thirds saying they plan to in the next year.

Valk says in most cases those already engaged are “testing" the market in terms of how DeFi works, and its available infrastructure and liquidity.

The digital transaction and tokenization investment platform, founded in 2019, says there has been substantial growth across private markets this year as more financial institutions tap in to secondary markets transactions for new revenue opportunities.

The total value of assets currently held in DeFi technologies is estimated to be around $80 billion and forecast to grow to around $200 billion by the end of next year.

“The past nine months has seen phenomenal growth, but the private markets sector is worth more than $100 trillion, and there is a lot of work to do as well in other markets,” co-founder and CEO Antoine Loth, said.


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