Profond, the CHF11bn (€10.7bn) Swiss pension fund for small and mid-sized firms, is not yet ready to invest in crypto currencies that are highly volatile, said chief executive officer Laurent Schlaefli at MONEY – The Swiss Finance Summit.
High volatility and a lack of regulatory framework were the reasons given against investing in crypto currency. Profond is neither invested in gold nor in cryptocurrencies, Schlaefli added.
Profond recorded a 12.7% return last year, applying an interest rate on retirement assets of 8%. The pension fund has a high allocation to equities (52%) and real estate (25%).
Building up reserves to potentially withstand volatility is considered of interest to members, some of whom may also be concerned about the possibility of losing their pension assets, therefore Profond prefers to focus on established investments, it said.
The Federal Council last year fully implemented a new law regulating crypto asset trading via distributed ledger technology (DLT).
According to the government, the new rules improve the framework for blockchain and DLT companies in Switzerland, and give legal certainty about the segregation of crypto assets in the event of bankruptcy.
The regulation creates a new licence category for “DLT trading systems”, under the Financial Market Infrastructure Act, that can offer trading services for settlement and custody, open to both regulated financial market players and private customers.
A flexible legal framework was developed for possible new forms of financial market infrastructure due to technological developments, according to a document by the Federal Department of Finance explaining the new rules.
A growing market
Last year the the crypto segment on the SIX stock exchange grew by 673%, reaching a trading turnover of CHF8.6bn, up from CHF1.1bn the previous year, SIX said.
The number of transactions grew more than sixfold to a total of 354,542 trades in crypto products, up 634% compared to 48,300 in 2020, SIX added.
Fidelity has listed two new Bitcoin Exchange Traded Products (ETPs) in US dollars and Swiss francs for trading on the SIX Exchange, bringing the number of crypto ETP issuers to 10, and the number of tradable crypto ETPs to 133, SIX announced last week.
The Swiss Exchange offers investors access to 208 products based on 18 cryptocurrencies, combining ETPs and structured products, it said.
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