Deutsche Bank Applies for License to Offer Crypto Custody Service

Deutsche Bank Applies for License to Offer Crypto Custody Service 

Deutsche Bank, the largest bank in Germany, has applied for regulatory approval to provide custody services for digital assets, including cryptocurrencies. The bank's strategic decision aims to capitalize on the growing demand for crypto-related services while enhancing its fee income.

Move to Boost Fee Income with Digital Asset Services 

Bloomberg has reported that Germany’s largest bank by total assets, Deutsche Bank AG has officially applied to the Federal Financial Supervisory Authority (Bafin) in Germany, signaling its intention to enter the digital asset space.

David Lynne, the head of Deutsche Bank's commercial banking unit, revealed the development during a recent conference, stating, “We’re building out our digital assets and custody business.” Lynne added:

"We just put our application into the Bafin for the digital asset license."

This move aligns with Deutsche Bank's broader strategy to strengthen its corporate bank division and generate increased revenue. The bank's asset management arm, DWS Group, has also been exploring opportunities in the digital asset realm to drive growth. By expanding into crypto custody services, Deutsche Bank aims to provide its customers with a comprehensive suite of financial solutions, adapting to the evolving needs of the modern market.

Custodian of Digital Assets 

The initial plan to offer digital asset custody was first mentioned by Deutsche Bank's corporate bank division in late 2020, under the leadership of Stefan Hoops. Since then, the reins have been handed over to David Lynne, who took charge a year ago. Now, with the application submitted, Deutsche Bank is one step closer to realizing its vision of becoming a trusted custodian of digital assets.

The regulatory body responsible for granting licenses for crypto services in Germany, Bafin, has witnessed growing interest from financial institutions since the implementation of the new Germany Money Laundering Act. This act, in effect since the beginning of 2020, enables banks to offer crypto products alongside traditional investments. Reportedly, Bafin has already received more than 40 "expressions of interest" from banks seeking approval to operate a crypto custody business.

Deutsche Bank's foray into the crypto custody realm holds significant implications for the financial industry. As the demand for cryptocurrencies continues to surge, the bank's move showcases a commitment to adapt and thrive in the digital era. It remains to be seen how the regulatory process unfolds and the impact it will have on Deutsche Bank's ability to cater to the growing appetite for crypto-related services.

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