Commerzbank, the fourth-biggest bank in Germany, has obtained a custody license for cryptocurrencies. This noteworthy advancement coincides with a wider pattern in the European banking industry. The announcement by German cooperative lender DZ Bank AG of launching a digital asset custody platform indicates the industry’s increasing interest in offering cryptocurrency-related services.
The license will enable the bank to create a comprehensive digital (cryptocurrency) asset services list. Information from the company’s official statement released to the media today shows that when this service finally commences, it will be the first German-based bank to offer such a service fully.
This development is coming after the company hinted about launching such service earlier this April. Industry players are also skeptical about the success of the proposed digital assets custody service, judging from the circumstances that led to the collapse of FTX.
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Commerzbank and DZ Bank AG’s approach is a calculated reaction to the shifting financial landscape, where cryptocurrencies are becoming recognized as a real asset class. In response to the changing demands of their clientele, traditional banks are modifying their offerings as institutional investors look more closely at the potential in the digital asset market.
Elmaz Sabovic from Finbold has explained that European banks’ cautious entry into cryptocurrency stems from their aim to allay regulatory worries and reduce associated risks. Sabovic also explained that due to ongoing concerns about fraud and money laundering, several financial institutions have taken a cautious approach to cryptocurrencies.
Also in the announcement by the Commerzbank, the statement said that this development will allow the Frankfurt-based bank provide a wide range of digital asset services, with special emphasis on cryptocurrency assets.
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The action might also have wider effects on the bitcoin market, leading other institutions to investigate related options. Growing numbers of financial institutions entering the cryptocurrency custody market may help the sector mature and boost institutional investors’ trust.
Recent observation shows that traditional banks are changing, making conscious effort to advance into the digital asset market. Commerzbank’s acquisition of a cryptocurrency custody license is a big step in the right direction, moving away from the traditional banking industry’s early mistrust of cryptocurrencies.
According to the Chief Operating Officer of Commerzbank, Dr. Jörg Oliveri del Castillo-Schulz, in a statement about the recent development said that getting the license is the company’s biggest achievement so far. He added that this signifies that the company’s ongoing technological innovations is working, and is solely targeted at customer service improvement, especially in the field of digital assets management.
As of press time, SocGen’s blockchain section has also received a license from France’s cryptocurrency law sometime in July. DZ Bank AG, a German-based cooperative lender, intends to delve into digital assets custody services. It was gathered that the German cryptocurrency industry operates slightly differently from the rest of European countries.
Germany requires interested banks to secure an official expansion of its licenses before providing cryptocurrency services like keeping custody of these assets. This rule allows the European banking authorities to monitor the extent of transparency in their country’s cryptocurrency industry. On the other hand, the European Central Bank (ECB) has said it is aware of the drawbacks lenders encounter in the cause of evading scrutiny by the authorities.