Germany’s largest bank, Deutsche Bank, reportedly applied for a digital asset custody license from the country’s financial regulator, the Federal Financial Supervisory Authority, or BaFin, in an attempt to expand its sources of revenue, according to Bloomberg reports.
This follows a similar move by the bank’s investment arm, DWS Group, and aims to expand custody services for digital assets, including cryptocurrencies. Previously, the DWS Group had expressed interest in investing in two German cryptocurrency companies. Companies trading with the DWS Group included Deutsche Digital Assets, a provider of exchange-traded cryptocurrency products, and market maker Tradias.
The banking giant’s corporate banking division first revealed its plans to offer services related to digital assets in 2020, but had not announced a timetable for its introduction. On June 20, the head of Deutsche Bank’s commercial banking unit, David Lynne, announced that the lender is building its “custodial and digital asset business” and has applied for a license from the country’s financial regulator, according to Bloomberg.
Although Deutsche Bank has been critical of Bitcoin (BTC) and the volatility of the cryptocurrency market in recent years, his tone towards the sector has changed in 2023. In February, Deutsche Bank Singapore, in collaboration with Memento Blockchain, successfully completed testing of 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 fiat-to-digital on-ramp for users.
For its part, German securities processor Deutsche WertpapierService Bank has also created a Bitcoin-focused platform, wpNex, for retail clients. The new platform offers cryptocurrency accounts alongside the other accounts of the bank’s customers without requiring any additional Know Your Customer process from them.
German banking institutions had stayed away from the cryptocurrency sector, citing its volatile nature and unpredictability; however, that stance seems to be changing in 2023as major banking institutions continue to explore the potential of adding digital asset-focused services for customers.
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