By George Ward
The rapid expansion of the crypto sector has attracted attention from leading traditional financial institutions and banks, thanks to the mainstream adoption of virtual currency. In a surprise move, reports have surfaced that Germany’s most prominent banking platform, Deutsche Bank, is seeking a crypto custody license to become a crypto market service provider.
Deutsche Bank Eyes Crypto Market
According to reports, Deutsche Bank has submitted an application seeking a license to offer custody services for digital assets. Thus, the German banking behemoth has become the latest traditional financial player looking to explore the crypto market.
If approved, the move would allow Deutsche Bank to offer custody services for various digital assets, including cryptocurrencies. The German bank is a prominent player in the European financial space, boasting a substantial balance sheet of more than €1.3 trillion ($1.42 trillion)
It is worth noting that crypto custody services encompass the storage and administration of digital assets, specifically cryptocurrencies, for institutional and individual investors. These services include securing private keys for accessing and transferring digital assets and employing highly secure offline or online storage solutions.
According to the head of Deutsche Bank’s commercial banking division, David Lynne, the bank is building its digital asset and commercial services by filing its application to the German regulator for approval. Lynne further said that the move represents the bank’s more comprehensive strategy to boost its corporate banking revenue.
Despite the skepticism surrounding the industry, the executive added that cryptocurrency represents an evolving financial landscape that presents opportunities the bank can explore.
Deutsche Bank’s Crypto Interest
Three years ago, the bank’s corporate arm revealed plans to offer crypto-based services but didn’t specify any timeline for its launch. Fast forward to June 20, 2023, the German banking giant has sought regulatory approval to offer crypto custody services.
It is worth noting that the country’s regulator has stringent requirements that crypto service providers must meet before securing an operating license. Interestingly, Deutsche Bank had previously been critical of Bitcoin and the broader crypto industry, citing volatility issues.
However, the bank’s tone changed at the start of the year after its Singapore arm, in partnership with Memento Blockchain, completed trials for a tokenized investment product called Project DAMA. Elsewhere, Deutsche WertpapierService Bank, a securities processing platform, has launched wepNex, a Bitcoin-based platform for retail clients.
The new service offers bank users access to crypto and regular bank accounts without needing additional know-your-customer (KYC) verification. Additionally, users could have investment options concerning the type of crypto products they want.
For years, the German banking sector has distanced itself from cryptocurrency, citing its volatile nature and market unpredictability. Meanwhile, some of these banks started changing their stance at the start of this year by offering digital assets-related services to their existing customers.