Rich Old Men Demand Answers: Traditional Banks Compete for the Crypto Market in the UAE

Traditional wealth investors in the United Arab Emirates are making it clear what they want, and private banks are finally listening. A recent survey with 3,851 high-net-worth (HNW) investors and 456 wealth management professionals, conducted in the first quarter of 2025, reveals a crucial scenario: although 39% of the region’s affluent clients own cryptocurrencies, only 20% of them receive professional guidance from traditional wealth managers for these assets.

This discrepancy is a business problem for the private banking industry. According to the survey released by Avaloq, a Swiss company specializing in software for financial institutions, 63% of high-income investors have already switched or are considering switching managers – and unanswered questions about cryptocurrencies are at the heart of this dissatisfaction.

An Unignorable Demand: Why Old Investors Are Now Demanding Crypto Management

Dubai, Singapore, and Switzerland are consolidating as epicenters for digital asset investors, and the scene in the United Arab Emirates is particularly dynamic. With a clear regulatory framework through the Virtual Asset Regulatory Authority (VARA), in operation since 2022, and the presence of family offices linked to oil fortunes, the region has become a magnet destination.

Demographic transformation accelerates this trend. Children of ultra-rich families are educating their parents about digital assets – a generational reversal that forces the old wealthy to adapt their investment strategies. Meanwhile, the recovery of crypto markets after the sector’s harsh winter, combined with Bitcoin reaching new highs in 2025, has created an emerging class: the number of cryptocurrency millionaires reached 241,700 globally, a 40% increase from the previous period, according to the Henley & Partners Crypto Wealth Report 2025.

Why Traditional Banks Remained Absent

Obstacles for conventional institutions are well known. “As cryptocurrencies evolved as an asset class, there has been a growing need among private bank relationship managers to serve clients who are not being served,” explains Akash Anand, head for the Middle East and Africa at Avaloq.

The root problem isn’t intentional: it’s technological and psychological. Cryptocurrency volatility causes nervousness. The complexity of managing wallets, private keys, and custody arrangements creates headaches for both professionals and clients. Additionally, for investors who do not yet own crypto, fear dominates: 38% cite market volatility, 36% mention lack of knowledge, and 32% express distrust in exchanges as main reasons for not investing.

This gap has created an opportunity that Avaloq has successfully capitalized on in recent years. The company developed integrated cryptocurrency custody platforms with personalized support within financial institutions, utilizing Fireblocks’ secure storage technology and collaborating with institutional partners like BBVA and Zurich Cantonal Bank.

The Race of Managers: Emerging Solutions

Old wealthy investors are demanding answers, and the industry is finally responding. “There has been a race among traditional wealth managers to prepare to offer crypto,” summarized Anand in an interview with CoinDesk.

Opportunities in the sector are abundant. There is a “healthy pipeline” of private banks and financial institutions seeking to customize their existing online banking systems with Avaloq’s crypto custody technology or implement their pre-configured platforms. Companies aim to create integrated, comprehensive solutions that work seamlessly with their legacy infrastructures.

Trust as a Foundation: The Game-Changer

With the cryptocurrency industry maturing after the 2021 boom and subsequent crash, the digital asset sector has gained legitimacy as a serious investment class. Institutional money is increasingly dominant. However, trust remains the most critical asset.

“There have been some quite spectacular falls involving certain cryptocurrency exchanges, which created many trust issues,” Anand notes. “Our research shows that there is an opportunity for banks and wealth managers to intervene and provide that trust in the form of fully integrated, secure, and compliant custody.”

Established wealth investors don’t just want access to cryptocurrencies. They want regulatory security, full compliance, and the peace of mind that only trusted institutions can offer. That is precisely the differentiator that old wealthy investors seek when demanding their traditional managers enter the crypto space.