UBS May Be the Next Wall Street Bank to Let Clients Trade Crypto

Better late than never.

UBS will reportedly allow certain clients to trade bitcoin and Ether in the near future, although the banking behemoth is still determining how the program will be rolled out, according to a Bloomberg report last week. The Zurich-based firm would join the likes of JPMorgan and Morgan Stanley, which have both opened up access to crypto for clients in recent years. The move also signals the bank’s willingness to continue building on its tokenization programs.

“We have seen that more brokerage firms in the US are opening up crypto access,” said Aniket Ullal, head of ETF research and analytics at CFRA. “It doesn’t surprise me.”

Swiss ETF Knife

The UBS program could begin with clients of its Switzerland bank before expanding into the Asia-Pacific region and the US, per Bloomberg. The move marks a divergence from UBS’s digital assets initiative, which has previously focused on a tokenized money market fund on the Ethereum blockchain and a blockchain-based payment system. “We have seen wealth and brokerage firms being more open to making [crypto] available to the investors in their platform,” Ullal said. “It’s keeping with a broader trend.”

Other firms have also joined the crypto fray. They include:

• Vanguard, which recently announced that it would allow crypto exchange-traded fund access for some of its investors.
• Bank of America, which earlier this month said that it will give institutional clients access to bitcoin.
• JPMorgan, which became the first major banking institution to offer its retail clients access to bitcoin in 2021 and launched its own digital currency, JPM Coin, in 2019.

Demand and Supply. A UBS spokesperson told Advisor Upside that “[a]s part of UBS’s digital asset strategy, we actively monitor ⁠developments and explore initiatives that reflect client needs, regulatory developments, ‍market trends and robust risk controls.” Some 92% of investors now want access to digital assets beyond bitcoin and Ethereum, according to a recent survey.

“A lot of interest in bitcoin and crypto in general is driven by prices. People are attracted to it because you have potentials for return,” Roxanna Islam, head of sector and industry research at VettaFi, told Advisor Upside. “We’ll start seeing a little bit more comfort easing into some of these newer products as the beginning of the year goes by.”