Fintech Conversation Series with SDX Executive Team

In the last few months, there have been many interesting developments in crypto with major corporations making significant entries. We sat down with Eric Schmalzbauer, Head of US Clients and Product Management at SDX, and spoke about his take on some recent announcements and what could lie ahead in the near future.

Share Post:

What was the most exciting crypto news in 2021 for you?

For me, the biggest thing that happened was Tesla announcing their investment of USD 1.5 billion of their corporate treasury into Bitcoin (BTC). It is another major US-based company making a significant investment in crypto, following MicroStrategy, which has already invested a couple of hundred million USD in BTC.

What makes this so significant to you?

Not only the fact that they are investing in crypto is significant, but also the magnitude of the actual USD amount which they have committed. It is also an affirmation that it is not just one individual firm or one CFO making a bet on crypto but an actual trend in the industry. As we observe more companies instructing their treasury departments to allocate funds to crypto, we also encounter investment firms making moves in cryptocurrencies. A recent example being Massachusetts Mutual Life Insurance Co. purchasing USD 100 million in Bitcoin for its general investment fund, which was announced as ‘a first step’” opening a potential to explore future opportunities.

Which companies could follow in your opinion?

It is still early days, and I would say that currently, a lot depends on educating the CFOs on why they potentially would do this and then helping those CFOs to further educate their boards on the benefits of allocating a portion of their funds to cryptocurrencies.  I think that one of the major firms that could follow this trend is Apple. They have a large amount of cash on their balance sheet, and they have a high cash flow business; hence they could potentially explore investing some part of it in crypto. Additionally, Apple has recently entered the payment space, so I believe that crypto could be an important aspect for them as well, not only as a tool to diversify their balance sheet but also as an opportunity for broader services in facilitating crypto payments.

I think it will become more important for large corporations to offer crypto payments. PayPal has recently announced that they will add cryptocurrencies to their services. Companies that hold crypto currencies on their balance sheets and offer crypto payment services to their customers can be seen as a proof point to emphasize that they as institutions are also accepting some risk. Many big technology companies like Amazon, Microsoft, and Google also have high amounts of cash on their balance sheet. Those might be coming next, being more open to experimenting, especially since all of these could offer payment services as well.

What about banks?

I believe that traditional banks, especially the bigger banks, will get involved in the later future, as they are highly regulated, and the crypto space is not mature enough yet. Many people may question the viability of crypto or Bitcoin as a safe haven asset. Still, I think that over time, cryptocurrencies will help to facilitate the management of cash operations and balance sheets.

Thank you for your time, Eric!

Related content

The digital asset landscape has been on an evolutionary trajectory, and 2024 is poised to be a pivotal year that has the potential to reshape the financial industry.
In this interview, Alexandre Kech, Business Head Digital Securities at SDX, shares his insights on the transformative potential of blockchain technology in the financial industry and what challenges lie ahead. Alexandre highlights how blockchain can revolutionize financial processes, leading to substantial savings and efficiencies. He discusses the challenges that traditional financial institutions face in adopting blockchain and emphasizes the importance of universal regulations and global standards. Alexandre also addresses the critical aspect of change management within financial institutions and offers an optimistic outlook for the adoption of blockchain in finance over the next decade, provided these challenges are effectively addressed.
In this interview, Mathias Studach, Head of Finance, Risk, and Organizational Development at SDX (SIX Digital Exchange), discusses the significance of Central Bank Digital Currencies (CBDCs) and their impact on the financial industry. Mathias shares his insights on how he envisions a future where CBDCs play a pivotal role in the financial industry, coexisting with stablecoins and other cryptocurrencies. Increased interoperability between CBDCs and blockchain applications will drive efficiency and global financial integration, with Switzerland at the forefront of innovation.