Deutsche Bank AG has recently made an exciting announcement, revealing its intention to provide custody services for cryptocurrencies. Despite the volatile nature of crypto assets, prominent financial institutions are taking notice of their potential.
As reported by Bloomberg, Deutsche Bank, the largest bank in Germany, has applied to BaFin (Federal Financial Supervisory Authority) for permission to operate a custody service dedicated to digital assets, including cryptocurrencies.
Embracing Cryptocurrencies: Deutsche Bank’s New Endeavor
Deutsche Bank, a renowned German multinational investment bank and financial services company headquartered in Frankfurt, Germany, has long been aware of the surging interest in cryptocurrencies and has been eyeing an opportunity to join the game for over two years. In late 2020, the bank’s corporate bank divisions hinted at their plans to introduce digital asset custody; however, no specific timeline was provided for the service’s launch.
By applying for a custody license, Deutsche Bank is paving the way to offer cryptocurrency services to its clients. Securing the license will enable the bank to store cryptocurrencies on behalf of large investors, such as hedge funds and financial firms.
David Lynne, the bank’s head of corporate activities, shared that this move aligns with the bank’s broader strategy of increasing fee income and expanding its offerings related to digital assets. He emphasized the bank’s dedication to building its digital assets and custody business, stating, “We’ve recently submitted our application to Bafin for the digital asset license.”
A Trend Among Banks: Digital Asset Licenses
Deutsche Bank is not alone in recognizing the significance of catering to crypto investors. Numerous major banks worldwide are obtaining licenses for the custody of digital assets, enabling them to offer institutional clients exposure to cryptocurrencies through trading, storage, and related services.
According to Handelsblatt, a local German business newspaper, in 2020, 40 banks expressed their interest in venturing into the crypto custody business to BaFin, the German regulator.
Commerzbank, Germany’s second-largest bank, also applied for a license to provide crypto custody and trading services in Germany last year.
Furthermore, ZA Bank in Hong Kong has announced plans to introduce retail virtual asset trading. The Hong Kong Securities and Futures Commission (SFC) has stated its intention to grant licenses for retail virtual asset trading platforms in the near future.
Deutsche Bank’s entry into the cryptocurrency industry solidifies its position as a major banking institution exploring new opportunities. This move may revolutionize the mainstream financial industry’s acceptance and adoption of digital assets.
While regulatory uncertainties persist regarding the impact of regulations on cryptocurrencies and other digital assets in Germany, the fact that major banks like Commerzbank and Deutsche Bank are venturing into digital asset custody indicates a promising future for cryptocurrencies in Germany.