Investment Bank of Germany Deutsche Bank has applied to the financial watchdog in Germany to offer custody services for cryptocurrencies.
David Lynne, the head of the bank’s commercial banking division, claims that the firm has just filed a request file with Bafin (the German securities regulator), and is currently waiting for formal authorization from regulators to deal with cryptocurrencies.
To increase fee income for its corporate bank subsidiary, Deutsche Bank applied to BaFin. The move supports efforts made by its subsidiary asset management company, DWS, to increase revenue through services involving digital assets.
To speed up growth, DWS was considering investing in two German cryptocurrency businesses. They were Tradias, a market-making company, and Deutsche Digital Assets, a provider of cryptocurrency exchange-traded instruments.
BaFin monitors firms in Germany that offer services relating to cryptocurrency assets. Bafin monitors firms like cryptocurrency trading platforms, cryptocurrency ATM operators, and businesses providing cryptocurrency custody services.
Crypto firms can comfortably sell and provide their services in the German market after they have a BaFin license.
Several businesses, including a division of the German Boerse Stuttgart stock market, Berlin-based Finoa, and well-known cryptocurrency exchange Bitpanda, have already received crypto custody licenses from the regulator.
BaFin issued a warning in February 2022 about threats and the speculative nature of investing in cryptocurrency assets. It cautioned readers not to trust investing tips they find on social media because they can be false or inaccurate.
Deutsche Bank previously tried to provide custodial services for digital assets. It made the same attempt in 2020, although the launch date of the services has yet to be disclosed.
As institutional participants in the Crypto industry become more common, there will be a greater need for suppliers of regulated custodial solutions.
Other significant financial institutions like BlackRock and Fidelity have indicated their plans to enter the cryptocurrency sector, which is why Deutsche Bank is taking this path.
The most recent step by Deutsche comes after the company had a serious liquidity issue in March due to the failure of Credit Suisse. But after this storm, the financial powerhouse of Germany appears to be standing strong.
Additionally, German authorities are attempting to relax the rules governing cryptocurrency lending and staking. MiCA guidelines will simplify regulatory changes.
The use and interest in cryptocurrencies among Germans have been growing, and this trend is expected to pick up momentum as the country’s legal framework becomes more open.
Other countries are moving cautiously towards the sector despite the U.S. SEC’s increasing crackdown on the cryptocurrency industry.
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