Bitrabo Editorial
Deutsche Bank AG has announced its plans to offer custody services for cryptocurrencies. As the value of crypto assets remains volatile, major banking institutions are starting to take notice.
According to Bloomberg, Deutsche Bank, Germany’s largest bank, has applied with the BaFin in Germany to operate a custody service for digital assets such as cryptocurrencies.
Deutsche Bank Takes Step Into Cryptocurrencies
Deutsche Bank is a German multinational investment bank and financial services company headquartered in Frankfurt, Germany. The bank has recognized the growing mainstream interest in cryptocurrencies and has been looking to enter this space for over two years. In late 2020, the bank’s corporate bank divisions hinted at plans to introduce digital asset custody, but no specific timeline was provided.
By applying for a custody license, Deutsche Bank will be able to offer cryptocurrency services to its clients. This means that the bank can store cryptocurrencies for large investors, such as hedge funds or other financial firms.
David Lynne, the bank’s head of corporate activities, stated that this move is part of a larger strategy to increase fee income and expand income from offerings linked to digital assets. He mentioned, “We’re building out our digital assets and custody business. We just put our application into the Bafin for the digital asset license.”
Total market cap holds $1 trillion as institutional interest rises | Source: Crypto Total Market Cap on TradingView.com
Other Banks Obtaining Digital Asset Licenses
Deutsche Bank is not the only financial institution looking to cater to crypto investors. Other major banks around the world have also started obtaining licenses for the custody of digital assets. This allows them to provide institutional clients exposure to cryptocurrencies through trading, storage, and other services.
According to a local German business newspaper, Handelsblatt, in 2020, 40 banks approached the German regulator BaFin expressing an interest in getting into the crypto custody business.
Germany’s second-largest bank, Commerzbank, also applied for a license to offer crypto custody and trading in Germany last year.
Hong Kong’s ZA Bank announced plans to offer retail virtual asset trading after the Hong Kong Securities and Futures Commission (SFC) and said it would soon start giving out licenses for retail virtual asset trading platforms.
Deutsche Bank’s entry into the cryptocurrency industry signals a broader acceptance of digital assets by the mainstream financial industry. However, there is still uncertainty about how regulations may impact crypto and other digital assets in Germany in the near future. Nonetheless, the move by major banks like Commerzbank and Deutsche Bank to offer digital asset custody indicates a bright future for cryptocurrencies in Germany.
Featured image from Invest Advocate, chart from TradingView.com