Germany’s banking industry is slowly warming up to the crypto sector, with multiple partnerships and crypto services launching in 2023 after a long, cautious approach.
Germany’s largest banking institution, Deutsche Bank, has reportedly applied for a digital asset custody license to the country’s financial regulator, the Federal Financial Supervisory Authority, or BaFin, in a bid to expand its revenue streams, Bloomberg reported.
This comes after a similar shift from the bank’s investment arm, DWS Group, and aims to expand on digital asset custody services, including cryptocurrencies. DWS Group had previously indicated an interest in investing in two German crypto firms. Companies negotiating with DWS Group included Deutsche Digital Assets, a crypto exchange-traded products provider, and market maker Tradias.
The banking giant’s corporate bank division first revealed plans to offer digital asset-related services in 2020 but hadn’t announced a timeline for introducing the services. On June 20, Deutsche Bank’s commercial banking unit head David Lynne announced that the lender is building its “digital assets and custody business,” and that it has applied for a license with the country’s financial regulator, according to Bloomberg.
While Deutsche Bank has been critical of Bitcoin and the crypto market’s volatility over the past few years, its tone toward the industry has altered in 2023. In February, Deutsche Bank Singapore, in partnership with Memento Blockchain, successfully completed trials for a tokenized investment platform called Project DAMA (Digital Assets Management Access).
The digital asset fund was created with its own soulbound token and launched a direct fiat-to-digital on-ramp for users.
Separately, German securities processor Deutsche WertpapierService Bank also created a Bitcoin-focused platform, wpNex, for retail customers. The new platform offers crypto accounts alongside bank clients’ other accounts without requiring them to do any additional Know Your Customer processes.
Germany’s banking institutions had maintained a distance from the crypto industry, citing its volatile nature and unpredictability; however, that stance appears to be changing in 2023 as major baking institutions continue to explore the potential of adding digital asset-centered services for clients.
BY: PRASHANT JHA