Deutsche Bank, one of the world’s leading financial institutions, has applied to the Federal Financial Supervisory Authority of Germany (BaFin), intending to obtain regulatory approval to offer cryptocurrency custody services.
According to Bloomberg’s report, the approval of the custodial license would enable the bank to store and manage digital assets on behalf of its clients, providing a reliable solution for institutional investors seeking a secure way to store their digital assets.
Deutsche Bank: The Ideal Candidate For Cryptocurrency Custody?
Founded on March 10, 1870, in Berlin, Germany, Deutsche Bank was originally established as a bank for financing and foreign trade. However, it has grown to become the largest bank in Germany, managing over 1.476 trillion euros in assets.
Therefore, thanks to its reputation, it could become one of the ideal candidates for custodial services for cryptocurrencies on behalf of institutional investors.
However, like any other institution, it must comply with a series of regulatory requirements before offering custody services related to digital assets.
David Lynne, Head of Commercial Banking at Deutsche Bank, informed Bloomberg that the bank is “expanding” its business into “digital assets and custody” services through the application to BaFin.
On the other hand, Andreas Sack, Product Owner of Digital Assets Custody at DekaBank, a German provider of asset management solutions, stated that “Digital assets are a critical part of the future, a radical new way of representing assets, from currencies to real estate.” This statement came after allying with Metaco, a Swiss provider of digital asset custody and tokenization technology (recently acquired by Ripple), for the custody and management of their digital assets.
German Banks Aim to Secure Digital Assets
This is not the first time a German bank has attempted to enter the digital asset custody space. According to ZyCrypto, since April 2022, Commerzbank, one of the largest traditional banks in the country, has applied for a cryptocurrency custody license from BaFin. However, it has not been approved as of yet.
As of April 2022, over 25 companies in Germany had applied for BaFin’s approval to operate with cryptocurrencies. Out of all of them, only 4 have obtained regulatory approval, with Coinbase Germany, the German subsidiary of the U.S.-based cryptocurrency exchange Coinbase, being a notable example.
Similarly, DZ Bank, Germany’s second-largest bank, applied for a crypto asset custody license in 2022 but has not been approved by BaFin thus far. This demonstrates the growing interest of traditional German banks in the custody of cryptocurrency assets.