As an early mover in the traditional finance sector, the client strategically decided to incorporate cryptocurrencies into their product offerings. This move was designed to position the firm at the forefront of innovation, meeting the evolving needs of clients in an increasingly digital economy. Given the significant developments in recent years, particularly with the launch of Bitcoin and Ethereum Exchange Traded Funds (ETFs) for institutional investors in the US, the client initiated a Proof of Concept (PoC) for a staking solution.

For this reason, the initial focus of this thesis was to provide the relevant framework and literature review for the most well-known Proof of Stake (PoS) protocols in the crypto space with regards to their features, differences and ease of use or offering. Ethereum, being the largest and most in-demand PoS protocol, was selected for the PoC despite its complex implementation. Its successful integration is intended to serve as a blueprint for future initiatives.

The practical part of the thesis delved into the PoC’s design and the challenges faced during its execution. These included navigating regulatory hurdles and communicating with the Swiss Financial Market Supervisory Authority (FINMA) during the PoC, internal challenges related to the core banking system, which is not designed for digital currency or Web 3.0 use cases, and bringing up the need for the development and transfer of knowledge at the consultant level when dealing with customers. As the PoC was extended until the end of 2024, a final decision has yet to be made. The eventual outcome will be crucial in determining the client's strategic direction and could set the stage for broader integration of cryptocurrencies within the traditional financial sector.