Deutsche Bank, the largest bank in Germany, has taken steps to offer custody services for digital assets, including cryptocurrencies, by applying for a license from Germany’s Federal Financial Supervisory Authority (Bafin). This move is part of Deutsche Bank’s broader strategy to increase fee income and expand its presence in the digital asset space.
David Lynne, the head of Deutsche Bank’s commercial banking unit, confirmed the application during a conference, stating that they are actively building their digital assets and custody business. The bank’s aim is to obtain a digital asset license from Bafin, which would enable them to provide custody services for cryptocurrencies and other digital assets.
Deutsche Bank’s decision aligns with similar efforts made by its asset management arm, DWS Group, to generate revenue through digital asset-related offerings. By expanding its capabilities in the digital asset space, the bank hopes to tap into the growing demand for crypto-related services.
The bank’s corporate bank division had previously expressed its intention to offer digital asset custody, although no specific timeline for the service’s launch was provided. With the application for a digital asset license now submitted, Deutsche Bank is moving forward in realizing its plans.
In Germany, Bafin is the regulatory authority responsible for granting licenses to entities seeking to offer crypto services. The introduction of the Germany Money Laundering Act in 2020 allowed financial institutions to include crypto products alongside traditional investments like stocks and bonds. Following this development, Bafin received numerous expressions of interest from banks regarding the future operation of crypto custody businesses.
Deutsche Bank’s decision to seek a license for crypto custody services reflects its recognition of the potential in the digital asset space and its commitment to meeting the evolving needs of its customers. As the bank awaits regulatory approval, it remains to be seen how its entry into the crypto custody market will impact the industry and the bank’s overall strategy.
Frequently Asked Questions (FAQs) about crypto custody services
What is Deutsche Bank applying for?
Deutsche Bank is applying for a license to offer custody services for digital assets, including cryptocurrencies.
Why is Deutsche Bank seeking this license?
The bank is seeking the license to boost fee income and expand its presence in the digital asset space.
What is the role of Bafin in this process?
Bafin, the Federal Financial Supervisory Authority in Germany, is responsible for granting licenses to entities that want to offer crypto services in the country.
What other efforts has Deutsche Bank made in the digital asset space?
Deutsche Bank’s asset management arm, DWS Group, has also been working on enhancing revenue through digital asset-related offerings.
How does the new Germany Money Laundering Act impact this?
The Germany Money Laundering Act, effective from 2020, allows financial institutions to offer crypto products to customers alongside traditional investments. This creates an opportunity for banks like Deutsche Bank to provide crypto custody services.
How many expressions of interest did Bafin receive for crypto custody businesses?
Bafin reportedly received more than 40 expressions of interest from banks for approval to operate a crypto custody business in the future.