As more Chinese are interested in investing in tokens, Beijing-based Noble Private Bank aims to help Chinese rich families to allocate their overseas assets into cryptocurrencies – by pivoting from being a technology vendor to becoming a private bank.
The company got its start as a software provider linking banks’ relationship managers to their wealthy clients, via an app using big data and cloud services. The platform helps rich people in China do asset allocation and select investment products, and helps banks improve customer service, for activities both onshore and overseas. The company claims over 1,000 clients in mainland China, including wealthy individuals and banks’ RMs.
“Diversifying assets with tokens is the future,” said Tong Jingjing, founder of Noble Private Bank. With news of the Rothschild and Rockefeller families investing in cryptocurrencies, she believes private banks and family offices everywhere will increase demand for crypto assets. And no private bank in China offers this service so far.
From a vendor to a private bank
“We are applying for private banking license in Gibraltar,” said Tong, noting that Gibraltar is the first jurisdiction that has released regulations for initial coin offerings.
She says Noble has been working with a local law firm and has appointed a partner there for setting up the business. The whole process will take at most 18 months.
She says getting a private banking license in Gibraltar is necessary to be viewed by clients as a serious financial services firm. “Being a licensed bank will enhance our reliability,” she said.
Chinese investors have always been interested in cryptocurrencies, “but guidance is missing,” Tong said. There is a place for a bank with mainland Chinese origins to advise clients on matters including which token to invest in, how big shall be the amount, balancing exposures among companies or exchanges, and how to hedge the risk.
Founded in 2015, Noble’s initial purpose was to digitize private banking. Noble has now an overseas assets allocation app, and it is also developing a software-as-a-service family office and a blockchain-based service intended to execute family trust contracts.
The firm is now seeking the second-round fundraising of Rmb15 million, which it aims to close in three months. Tong hopes this round’s investors help widen the company’s customer base, as well as boost its tech and marketing capabilities. Noble is engaging with four investors at the moment, whom Tong declined to name.
According to Chinese media Toutiao, there are more than 10 million Chinese people investing in tokens. But the bulk of wealth is still in the hands of first-generation entrepreneurs who are now in their fifties and sixties. This generation doesn’t understand crypto-currencies or the idea of tokenizing a business, and sticks to traditional assets such as property and insurance.
But Tong says that is changing as a younger generation gradually inherits the wealth or builds its own.
For mainland Chinese, the biggest challenge is regulation. China banned ICOs and sales of digital tokens in 2017. Many people have assumed that investing in tokens is illegal worldwide.
The second challenge for Noble is attracting talent. “No matter how much you pay,” Tong said, “it’s very hard to find a person who speaks both private-banking and crypto languages.”