Deutsche Bank AG, the largest bank in Germany, has recently requested regulatory approval from Bafin to provide custody services for digital assets such as cryptocurrencies.
The recent regulatory crackdown by Western financial regulators has not deterred major participants from entering the cryptocurrency market.
According to David Lynne, head of Deutsche Bank’s commercial banking division, this move is part of Deutsche Bank’s larger strategy to increase fee income for its corporate division.
In addition, it emphasizes the bank’s efforts to increase revenue for its investment arm DWS Group through digital asset offerings. Lynne, speaking to Bloomberg, stated:
“We’re building out our digital assets and custody business. We just put our application into the Bafin for the digital asset license”.
This is not the first time Deutsche Bank has tried to provide custody services for digital assets. It made a similar effort in 2020 but has never specified when it will launch the services.
As institutional investors’ participation in cryptocurrency increases, the demand for regulated custodial service providers will increase. Thus, Deutsche Bank’s decision is well-timed, as major players such as BlackRock and Fidelity have already signaled their intent to enter the cryptocurrency market.
Deutsche Bank and Crypto
The recent move by Deutsche Bank comes just months after the bank faced a significant liquidity crisis in March of this year, during Credit Suisse’s demise. However, the German banking behemoth navigated this confidently and appeared on solid ground.
On the other hand, German regulators have also endeavored to relax rules regarding crypto staking and lending. With the implementation of the MiCA laws, regulatory developments will be further streamlined.
The rate of crypto adoption among German citizens has been rising consistently and will increase further once regulatory clarity is achieved.
