Crypto Custodian Taurus Enlists Lido to Bring Liquid Ethereum Staking to Swiss Banks

Taurus, which counts Deutsche Bank and Santander as partners, expects European jurisdictions to follow Switzerland’s example.

AccessTimeIconFeb 14, 2024 at 1:00 p.m. UTC
Updated Mar 8, 2024 at 9:32 p.m. UTC
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  • Swiss-based FINMA-regulated banks can now offer liquid staking via Taurus and Lido.
  • Taurus is working with Deutsche Bank and Santander.
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  • Banks allowing their customers to earn an income from holding and staking Ethereum tokens came a step closer, thanks to a partnership between Swiss-based cryptocurrency custody firm Taurus and Lido, a specialist in Ethereum staking.

    For now, Lido’s liquid staking product, where firms lock up their ether (ETH) on the blockchain and receive a digital record of that in the form of another token (stETH) that can be used for trading elsewhere, is only available to Swiss-based, FINMA-regulated banks partnered with Taurus – which also works with Deutsche Bank and Santander.

    “The goal is to build a bridge between the world of digital assets with the world of traditional finance,” said Taurus CMO Victor Busson in an interview. “So Taurus is enabling institutions such as banks to access liquid staking solutions, with Lido being the leader in that space. We are seeing more and more demand from our banking clients to offer these kinds of staking services.”

    There’s been talk of large financial institutions taking a hand in Ethereum staking, but not much evidence of it really happening, not least because of regulatory uncertainty around earning rewards from proof-of-stake blockchains.

    Swiss financial regulator FINMA last year issued guidance on staking cryptocurrencies, and the expectation is that broadly speaking, European jurisdictions will follow suit when it comes to exotic financial products such as liquid staking, according to Vassili Lavrov, head of product at Taurus.

    “One open question that was clarified from a banking law perspective was that when funds are locked up, those funds must be available to clients at any given time,” Lavrov said in an interview. "You could argue that is achieved by liquid staking, since funds are readily available and the token can be exchanged one-to-one with ETH. So I see a breakthrough opportunity for banks to get into solutions like Lido."

    In addition to partnering with Taurus, Deutsche Bank invested in the custody firm last year, part of a $65 million Series B round led by Credit Suisse that also included Arab Bank Switzerland and Pictet Group. Taurus is also said to be working with Santander.

    While the Lido protocol issues liquid staking stETH tokens for ether deposits, at no point does it take custody of funds, which can create some difficulty to the uninitiated, pointed out Marin Tvrdić, master of protocol relations at Lido.

    “It’s quite a steep learning curve,” Tvrdić said in an interview. “So you’re essentially putting your funds at risk if you're not familiar with how the technology operates, how the blockchain operates, and how to protect your funds. So this collaboration with Taurus is very important to enable accessibility on banking-grade software.”

    Edited by Parikshit Mishra.


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    Ian Allison

    Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.

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