Sygnum Bank and Avaloq Architecture
The trading process is based on the infrastructure provided by Sygnum Bank (Zurich), which is directly integrated into the existing Avaloq core banking system of BancaStato. This is a small IT detail, but it has great meaning behind it. It can be assumed that with such an attitude of Swiss banks towards cryptocurrency, the opportunity of crypto usage is not perceived as a product that should be developed anymore, but as a service that can be simply integrated.
What Changed for BancaStato Customers
For now, BancaStato offers a very limited assortment of cryptocurrencies, as only four of them are available (BTC, ETH, LTC, SOL). The purchases and sales can either be made in quantities of coins or in euros through the usual e-banking and online banking services of the financial institution. Furthermore, clients don’t go through any special onboarding when starting to use the crypto services – as soon as they start using cryptocurrency, it simply appears in the system along with the clients’ regular banking accounts.
This is done for the purpose of simplicity, as BancaStato does not operate as an exchange or deal with custody of crypto coins. Execution and custody of the assets is done by another company (Sygnum), which provides custody services for BancaStato by using hardware and software solutions, having its own governance as well as independent auditing of the coins while keeping their customers’ coins off the company’s balance sheet.
The Technical Shortcut: No Order Management System Required
The more interesting part of this deal sits below the surface. BancaStato connected to Sygnum’s B2B API without creating or obtaining a separate Order Management System, which is a level banks use to send and compare trades. Omitting this step decreases both costs and operational risks and means that BancaStato can later upgrade and extend its crypto capabilities without changing the entire infrastructure.
That makes BancaStato the first bank running on Avaloq’s software-as-a-service environment to offer this kind of API-based crypto trading. In the case of Avaloq, a core banking platform, this situation shows that digital assets can be used side by side with cash, stocks, and bonds, instead of having to be collected in a special program apart from the core system.
A Cantonal Bank Doing What Cantonal Banks Do
BancaStato, established in 1915, has been operating for over one hundred years as a traditional institution. Its mission is to provide services to the economy and tax savers of Ticino. For this reason, its entry into the market of cryptocurrency trading is of less importance as a bold decision than a signal that regulated crypto-trading has become very popular and common in Switzerland. Curzio De Gottardi, who is the manager of the Products and Services department of the bank, explained that the bank’s operations in the cryptocurrency area are just an addition to the current investment processes of the bank and do not change anything, with cryptocurrencies being in the same line of relations and clients’ expectations as stocks and funds.
Sygnum's Real Product Is Distribution, not Bitcoin
BancaStato has now become one of the over 25 banks and other financial institutions that use Sygnum’s B2B platform, which includes PostFinance, Zuger Kantonalbank, SocGen FORGE, Bordier & Cie and many more. Sygnum’s conditions that attracted such partners have always rested on the ability of the institutions to allow offering of the “really regulated” access, without being obliged to invest in the establishment of their own custody, execution, and compliance. According to Sygnum, the number of its partners already covers about one-third of the population of Switzerland.
The new distribution strategy has produced some significant results, proving to be successful. When PostFinance implemented the crypto-trading service powered by Sygnum, 61% of those customers purchased crypto for the first time. This data indicates that this integration does not simply appeal to existing traders, but actually attracts new customers to PostFinance. Levin later enhanced this service by introducing Ethereum staking through the same infrastructure.
The Regulatory Backdrop
The launch at BancaStato comes a few weeks after Sygnum Europe began operating a Crypto-Asset Service Provider license, now issued in Liechtenstein after a green light from regulators on June 30 under the Markets in Crypto-Assets (MiCA) regulation by the European Union. This license will allow Sygnum to use its banking-to-banking model beyond the borders of Switzerland, thus opening up the possibility to provide banks in the EU and European Economic Area with the same plug-in infrastructure as BancaStato.
What's Not Included (Yet)
BancaStato hasn’t announced any plans to expand beyond its four launch assets or add features like staking. But the bank now has a live, direct connection into Sygnum’s platform, and every other Sygnum partner bank that started small has tended to add capabilities later rather than stand still. Currently, the title reads more easily: a century-old regional bank has succeeded in making crypto trading as simple as checking one’s account balance and has done so without putting in place any new infrastructure.
