UBS Chairman Colm Kelleher spoke at the World Economic Forum in Davos about the future of blockchain and cryptocurrencies. Kelleher expressed optimism for the technology of blockchain, stating that it has the potential to reduce operational friction and costs, and can be a valuable addition to the chain. However, he also called for regulation around crypto, as he believes that banks cannot justify selling the product in its current form. Despite his reservations, Kelleher acknowledged that crypto will likely come back in some form, and UBS is looking for a regulatory framework that will allow them to accommodate it for their clients.
UBS has a long history with blockchain technology. The bank initiated the Utility Settlement Coin, which later became Fnality, a systemically important payment system now owned by 17 institutions. The bank also issued the largest blockchain bond of CHF 375 million ($410m) on the SIX Digital Exchange, and is a participant in other blockchain initiatives such as the Broadridge DLT repo offering, HQLAX DLT collateral management network, and the FundsDLT blockchain distribution platform.
When asked about his concerns for the future, Kelleher cited geopolitical issues and the non-bank financial sector as the biggest risks on the horizon, acknowledging that banks and insurance companies are well-regulated but regulators may have taken their eye off the non-banking NBFI sector.
