Swiss Seba Bank launches NFT depository despite market downturn

The slowdown in the non-fungible tokens (NFT) market does not appear to be a problem for Swiss cryptocurrency-focused bank Seba, as the firm now allows its customers to store NFTs.

Seba Bank has launched a regulated depository platform that allows its customers to store NFTs, the firm officially announced on 26 October. The NFT depository solution enables Seba Bank’s retail and institutional clients to store all Ethereum-based NFTs, including tokens from world-famous NFT collections such as Bored Apes and CryptoPunks, the firm said.

“There is no marketplace integration with Seba Bank at this time,” a spokesperson for the firm told Cointelegraph. The company will also carry out due diligence at the customer’s request before deciding whether to grant custody for a certain NFT or not. “The custody service offered is by no means limited to top collections,” the firm’s representative stated.

Seba’s new NFT custody platform is designed to provide customers with secure storage of their NFTs without managing the private keys themselves. The feature is integrated into customers’ bank accounts, allowing customers to include their NFTs in the overall wealth picture and manage them like any other digital asset.

Noting that Seba Bank is the “first regulated bank to offer NFT custody,” a representative at the firm expressed confidence in a bright future for NFTs, stating:

“We believe that in the coming years digital assets, including NFTs, will be adopted and will be increasingly accepted even by traditional financial operators.”

Urs Bernegger, co-head of markets and investment solutions at Seba Bank, emphasized that Seba is regulated by the Swiss Financial Market Supervisory Authority (FINMA) and has “core expertise” in cryptocurrency.

Seba Bank, headquartered in Zug, is a large crypto-focused financial institution in Switzerland, known for its close cooperation with local regulators. In 2019, Seba Crypto AG received a Swiss banking and securities dealer license from FINMA. In 2021, the regulator also awarded Seba Bank AG with a certified information system auditor license, enabling the firm to facilitate an institutional depository service.

Seba Bank’s NFT custody launch comes amid tough times for the NFT market. Weekly NFT trading volumes fell as much as 98% year-to-date at the end of September 2022. The median price of an NFT has also fallen sharply, while the overall NFT market continued to deteriorate further as the average weekly trading volume for NFTs fell by around 30% in September compared to August.

On the other hand, the number of NFT wallets has grown this year, and the number of such wallets has almost doubled from 3.4 million in January to 6.1 million in September.

Related: Institutional Crypto Custody: How Banks House Digital Assets

Despite the slowdown in the NFT market, many platforms and companies have rolled out NFT-related solutions recently. Last month, MetaMask Institutional – the institutional compatible version of the MetaMask crypto wallet – announced the NFT addition to its custodial services offering.

“Many investors who held NFTs have continued to stay in the market and are showing conviction despite the market downturn,” a Seba spokesperson said. According to the firm, the NFT space has continued to mature, with institutional investors launching NFT funds and funding new projects. “SEBA Bank addresses the need for a regulated custodian bank that can guarantee the safety and integrity of NFTs for professional and institutional investors,” the person added.