Finance

40% growth in institutional, corporate investors

Published

9 months ago

September 19, 2024

Binance CEO Richard Teng speaks in Singapore on Sept. 17, 2024, at an event hosted by the local foreign correspondents association.

Bloomberg | Bloomberg | Getty Images

Cryptocurrency exchange Binance has seen a 40% increase this year in institutional and corporate investors joining the platform, CEO Richard Teng told CNBC’s Lin Lin in an interview Wednesday.

“Allocation into crypto by institutions is just at the tip of the iceberg. It’s just beginning, because a lot of them are still doing their due diligence,” Teng said on the sidelines of the Token2049 conference in Singapore. He became CEO in November 2023.

“So we on our own, we are seeing a huge uptick in terms of institutional and corporate investors. We have seen a 40% increase in onboarding in that category throughout the course of this year alone,” he said. Teng did not name specific firms or share how large they were.

The stated growth reflects how so-called big money is warming up to bitcoin and other cryptocurrencies, and now willing to work with an exchange that was hit with a U.S. probe and $4.3 billion settlement.

Changpeng Zhao, the billionaire co-founder and former CEO of Binance, stepped down last year as part of the settlement. Zhao remains a major shareholder, Teng said.

Teng noted how Binance has pivoted from a founder-led company to one led by a board with seven directors — a structure he said that regulators are more used to.

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Teng joined Binance in 2021 as CEO of the company’s Singapore operations. He was previously CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market and chief regulatory officer of the Singapore Exchange, among other roles.

Bitcoin launched in 2009, paving the way for many other cryptocurrencies based on similar blockchain technology. The tech eliminates the need for a third-party intermediary by quickly creating a permanent and secure record of transactions between two parties.

More institutions coming in

After years of regulatory uncertainty, the U.S. in January approved the the first exchange-traded funds for spot prices of bitcoin. In July, the U.S. allowed trading of similar funds for ether, another cryptocurrency.

Such regulatory clarity “will give certainty to mainstream users,” Teng said. He attributed bitcoin’s record high earlier this year — above $70,000 in March — to “the effect of institutions coming through.”

He noted how BlackRock CEO Larry Fink has turned from bitcoin skeptic to calling it “digital gold.”

The company and other traditional Wall Street investment firms such as Franklin Templeton have also issued ETFs for bitcoin and ether.

Franklin Templeton CEO Jenny Johnson told CNBC in May that bitcoin gains at the time were due to “the first wave of the early adopters.” She said she expects another wave of “much bigger institutions” to buy crypto funds.

Bitcoin was trading near $60,440 as of Wednesday afternoon Singapore time.

Teng declined to share a specific price forecast, but noted how cryptocurrency prices tend to “warm up” 160 days after bitcoin goes through a technical event known as “halving.” The last such event was in April.

As of Wednesday, Teng pointed out the market was “nine days away from that 160 days.”

— CNBC’s Ryan Browne, MacKenzie Sigalos and Jesse Pound contributed to this report.

Finance

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Published

2 days ago

June 6, 2025

Business Finance News

Finance

Swiss government proposes tough new capital rules in major blow to UBS

Published

2 days ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”