A look at the creation of the Blockchain Association for Finance

The main role is to define the future of independent asset managers in terms of digital onboarding.

In recent years, blockchain technology has been touted as the next big thing after the creation of the internet. As cryptocurrency prices fluctuate, the underlying technology remains and has evolved. Businesses now have the potential to transform established processes safely and efficiently.

Blockchain technology in a nutshell

When you hear the word blockchain, you may be wondering what it actually means and what it allows businesses to do. Simply put, blockchain is a technology that stores information in encrypted parts (the blocks) that are linked together (the chain) and distributed among the network participants. This way, you don’t need a central repository or a trusted third party to verify this information. This prevents theft and modification of data. Information can take various forms, such as cryptocurrencies, medical records, contracts or identification data.

In light of the security advantages of the blockchain, the financial sector is studying this technology with multiple fields of application, in particular the tokenization of illiquid or non-financial assets (allowing for example to exchange fractions of a collection of classic cars such as shares traditional) or Trade Finance (replacing a manual paper process with an efficient electronic exchange of information between participants).

evolution of the ecosystem in Switzerland

Over the years, the Swiss blockchain environment has developed not only technologically and legally, but also in terms of ecosystems. By forming consortia made up of software publishers and industry players, the goal is to accelerate the adoption of this technology.

In 2021, a consortium of private banks and independent asset managers (MFIs) came together to work on market standards and founded the Blockchain Association for Finance (BAF). The BAF intends to bring together the various market players to define processes and tools that enable the safe and efficient exploitation of distributed accounting technology. One of BAF’s goals is to align the interests of MFIs and custodian banks in the light of increased regulation, knowing that the digitization of business processes is a trend that will continue to expand in the years to come. .

Specifically, it provides general governance and management rules for users of the Wecan Comply platform, which was created to allow depository banks and MFIs to exchange information on the blockchain during the onboarding process. With this structured and fully digital approach, platform users can reduce costs and save time in addressing their compliance obligations.

In one year, BAF has grown from a few founding members to 13 major private banks, including Lombard Odier, Edmond de Rothschild, Julius Baer and Pictet, along with 80 IFMs such as Swisspartners, Prime Partners and Pléion. To support its future growth, its Board of Directors was recently strengthened and now includes 7 members: Michael Chaille, President (Alpha FMC), Cédric Haenni, Treasurer (Pictet), Benoit Barbereau (Edmond de Rothschild), Sébastien Capt ( Prime Partners), Laurent Pellet (Lombard Odier), Pascal Schmohl (swisspartners) and Michel Yigit (Julius Baer).

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