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Deutsche Bank AG has recently announced it is now looking to offer custody services for cryptocurrencies. While the price of crypto assets remains volatile, major institutions 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, It seems the bank has always recognized the growing mainstream interest in cryptocurrencies and has wanted a piece of the action for over two years. The bank’s corporate bank divisions first hinted at plans to introduce digital asset custody in late 2020 but never specified when it planned to start the service.
Applying for a custody license means Deutsche Bank will soon be able to offer cryptocurrency services to its clients. Getting the license means that Deutsche Bank can store cryptocurrencies for large investors, like hedge funds or other financial firms.
According to David Lynne, the bank’s head of corporate activities, the move is part of a wider strategy to increase fee income and expand income from offerings linked to digital assets.
“We’re building out our digital assets and custody business,” Lynne said. “We just put our application into the Bafin for the digital asset license.”
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 is another major banking institution venturing into the cryptocurrency industry. This could be a game changer and signal a broader acceptance of digital assets by the mainstream financial industry.
There is still uncertainty about how regulations may impact crypto and other digital assets in Germany in the near future. However, major banks like Commerzbank and Deutsche Bank looking to offer digital asset custody, indicate a bright future for cryptocurrencies in Germany.
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