Bitcoin Suisse job cuts landed on the heels of this week’s news and they’re much more important than what the majority of the media coverage that focuses on. The custodian based in Zug, which is one of the pioneers in Swiss crypto, claims it may cut 60 positions, which is more than the entirety of the size of its Swiss team. The executives are describing the move as a shift towards an internationalization strategy. I’d say it’s a company trying to avoid a fight that it’s beginning to lose.
What the Bitcoin Suisse Job Cuts Actually Look Like
Take a look at the figures that are behind these Bitcoin Suisse job cuts, as they’re much more serious than what the news headline “up to 60” suggests. Bitcoin Suisse employs roughly 120 employees in Switzerland and cutting that much will affect nearly half the local team. Employees go through a consultation period before making an announcement due on the 20th of September. The company is still employed by around 200 employees across the globe and that’s why all of the damage is centered on Zug and not elsewhere.
Why Zug’s Crypto Pioneer Is Restructuring Now
The company’s leaders refer to this as an evolution away from being exclusively Swiss. This is the official version. The more direct version is that Banks are consuming the business of custody alive in one partnership at one time. The same is true for Canadian lenders are stepping up on the game as well, and an earlier stablecoin partnership by an important bank is proof of the concept.
The Bitcoin Suisse Job Cuts Reflect a Bigger Custody Battle
Citi is expected to launch the Custody+ service at the end of this year that will incorporate bitcoin custody natively into the same platform it uses for bonds and stocks. This poses a serious threat to an organization similar to Bitcoin Suisse. But clients are increasingly looking for cryptocurrency, cash, and stocks to be managed from one location rather than three distinct ones. Morgan Stanley, State Street as well as BNY Mellon are chasing the same concept and don’t have to adhere to Swiss labor laws before reducing costs.
Canadian banks are following the same pattern, but without the reductions. In the case of Bank of Canada, Bank of Canada worked with two of Canada’s largest banks to conduct the test of tokenized bonds which was able to settle a real-world transaction using blockchain instead of traditional plumbing. This was a pilot program of a smaller scale. But it’s the kind infrastructure that the Bitcoin Suisse job cuts reveal that everyone else is now looking to build on their own.
Where Bitcoin Suisse Is Consolidating Its Own Operations
Copenhagen is shut down as an IT development center completely in this plan, and the work becoming Bratislava as well as the new Vietnam hub. Zug remains as the its headquarters as well as wealth management centre, in addition, Liechtenstein, Abu Dhabi, and Bermuda retain their roles in the region. But nothing of this appears to be a company that is in trouble in the near future, at least not as of yet. In January, the group had around 3 billion francs in assets from clients and 95 million equity.
What the Bitcoin Suisse Job Cuts Mean for Canadian Investors
For Canadian investors all of this is directly exposing. A majority of people in Canada do not have an Bitcoin Suisse account, and many will never have. However, the same pattern of Bitcoin Suisse, cheap capital as well as deep compliance teams and everything in one login is now appearing in the home. Anyone who is considering a custodian this year ought to consider whether it is able to withstand banks that are building similar tools within their own.
And where does that leave the custodians impacted by the Bitcoin Suisse job cuts? Some will combine. Others will be able to shrink into the niche, hoping that they can fill the niche. A few may actually beat banks that are slower in their nature, but I wouldn’t bet my life on it.
