After a six months trial period, Liechtenstein Post concluded its over the counter cryptocurrency exchange service has been a success. The post now considers opportunities to scale the service.
Since February, customers can buy Bitcoin over the counter at Liechtenstein post’s branches in Vaduz and Schaan. In its announcement on February 15th, the post said its objective was to find “new business opportunities.”
It was meant as a trial. The post said after an introductory phase, it might extend the offer to other post offices and add additional cryptocurrencies to its exchange service. Flash forward six months, the post is reviewing the pilot. The bottom-line is positive, and the post now wants to expand.
Massive growth in June due to Bitcoin price increases
Gustav Gstoehl, regional director of the postal branches, says, “From February until Mai, the revenue has met our expectations.” In June, he adds, the growth accelerated rapidly. Gstoehl believes the Bitcoin price increases were the main reason for the higher demand in June.
While the post didn’t publish any exact figures, Gstoehl said on average there are ten people a day exchanging cryptocurrencies over-the-counter in the branches in Vaduz and Schaan. The company has not yet launched the service in any of its other branches.
Exchanging cryptocurrencies over the counter is just as simple as with any other currencies. The bank staff looks up the current exchange rate and executes the transaction. The customer then receives a crypto cold-storage which he can either keep using or transfer the coins to another digital wallet.
Next step: Lifting the daily limit from 1,000 CHF to 20,000 CHF
Liechtenstein Post is now thinking about the next steps. Gstoehl says, “We are thinking about ways to expand the service.”
At this point, the post offers to exchange four cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Ripple. One opportunity to expand the service would therefore be to add other currencies. However, considering the current market environment, there will rarely be any customer asking for another currency than those already offered. Bitcoin Cash might be a worthwhile addition. But the post says there are technical challenges.
So far, each customer could only exchange 1,000 CHF for cryptocurrencies per day over the counter. Lifting this limit will be the post’s next step. Gstoehl says, “The next step will follow after the summer. We will then lift the daily exchange limit to 20,000 CHF.”
The post also considers expanding the service to other branches. Gstoehl points out this would be relatively easy to accomplish. The only hurdle would be to train the counter staff. “Other than that, we did not have to invest any money to launch our crypto exchange services,” says Gstoehl.
Thus, exchanging cryptocurrency is a high-margin business for the post. It has partnered with Värdex Suisse AG, Switzerland’s biggest blockchain-payment provider. Whenever a customer wants to exchange cryptos, the post earns a commission.
So far, the total revenue is rather small, but considering that the post has had almost no expenses, this could turn into a profitable business once more customers demand the service. It’s a low-cost service, so there is not much to lose.