Ahead of ICO, Dukascopy Bank Beta Tests Crypto Deposits and WithdrawalsNovember 8, 2018
Dukascopy is taking a further step towards strengthening its budding cryptocurrency offering, this time allowing clients to deposit and withdraw funds in digital coins, as well as enabling free internal crypto-transfers between users of mobile banking.
Geneva-based Retail FX broker today shared plans to launch a dedicated crypto gateway which is now live testing the crypto-funding functionality.
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The move represents a shifting stance on funding and withdrawal options that are now more openly offered, and by extension demanded from clients. However, it is a contentious one, as most financial institutions in Switzerland are skeptical towards the crypto payments, citing security concerns and price volatility.
The Swiss bank explains that it will enable clients to use their own blockchain wallets to send and receive cryptocurrencies to/from their “crypto-fundable accounts” with Dukascopy.
“This is the bridge between the client’s account with Dukascopy Bank and a crypto-currency wallet of that client in blockchain. In the framework of that service, top-ups and withdrawals are possible only from/to a blockchain wallet where the client is the sole owner,” says the forex bank.
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There is a catch though – the crypto payments have to be made through ‘a one-time receiving address generated in the blockchain wallet of the Bank’. A curious requirement to say and it is still unclear how Dukascopy will validate the ownership of the wallet or determine the origin of virtual tokens.
“All addresses used for the top-up and withdrawal operations of the client will be examined on involvement in illicit or suspicious activities,” it added.
Bitcoin deposits and withdrawals will be eventually converted from/to the clients’ account base currency automatically. The brokerage has also set a maximum for crypto transactions at $50,000 per client.
Dukascopy continues its crypto-friendly approach
The retail industry has been radically transformed by cryptocurrencies over the last two years. After being confined to alternative exchanges for years, these instruments have finally managed to burst onto the trading scene amidst wider support.
The Swiss forex bank and brokerage firm also continues its crypto-friendly approach, having recently filed for approval of its ICO plans with the Swiss Financial Market Supervisory Authority (FINMA). Pending regulatory approvals, the initiative involves creating two cryptocurrencies: Dukascoins and Dukasnotes. The former will be used as a crypto means of payment that has a limited supply. The latter will be issued as a stablecoin.
Dukascopy also allowed crypto-related companies to open business accounts back in June. The step came despite mainstream Swiss banks have largely distanced themselves from engaging with cryptocurrency companies, which have come under increasing scrutiny from regulators. While the digital asset has been widely accepted in Switzerland, traditional lenders have been reluctant to do business with crypto-linked services providers because of money laundering concerns and prospects of a regulatory crackdown.
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