The statement conveyed on Thursday, March 30, by Boerse Stuttgart Digital confirms the firms received approval from the German’s supervisory authority to offer crypto custodian services.
Approval by BaFin Critical for Expanding into Custody and Trading
The issuance of the custodian license by the German Federal Financial Supervisory Authority (BaFin) will allow the blocknox service to expand into regulated crypto-related brokerage, custody, and trading operations. The operating license is set to expand the scope of Boerse Stuttgart Group operations into serving the budding digital assets clientele.
Boerse Stuttgart chief executive Matthias Voelkel indicated that the BaFin license made the company the pioneer among the established market participants authorized to offer custody services for cryptos without acquiring the involved digital assets.
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Voelkel observed that Boerse Stuttgart Digital would offer a compatible platform accommodating European banks, asset management firms, and brokers to utilize its services.
The region’s crypto brokers and family offices could integrate the custodian services. Boerse Stuttgart Digital has exchange operations in Switzerland, Sweden, and Germany, so he considers that possible. Also, it runs a Ljubljana-based office in Slovenia.
BaFin License Saves Boerse Stuttgart Digital from Pursuing Acquisitions
The approval of Boerse Stuttgart Digital to offer crypto custodian services differs from the approach undertaken by Bitcoin Group SE. The firm that runs the bitcoin.de platform for crypto trading purchased Bankhaus von der Heydt, already licensed in December 2022, to offer crypto custody.
Elsewhere, German asset manager DZ Bank confirmed partnering with Switzerland-based Metaco to offer crypto trading and custody services in February 2023.
Voelkel lauded the Boerse Stuttgart Digital achievement in Germany, citing the company’s existence in offering custody services via the blocknox arrangement. He revealed that the company offered custody services through provisional licenses made possible by the crypto guidelines introduced in January 2020.
Voelkel indicated that the company started trading services to German crypto clients in 2020 and launched the trading application in January 2021. Receiving the custody licensing is set to give the company an upper hand tapping into the early mover benefits as other contenders such as Binance play catchup.
Nasdaq Seeks Crypto Custody Services
The move by Boerse Stuttgart Digital mirrors the definitive plans declared by the Nasdaq exchange of establishing a limited-by-purpose trust entity in offering custody services.
The crypto custody services would subject Nasdaq to comply with the New York Department of Financial Services (NYDFS) supervision requirements. Also, it would be critical to comply with the provisions stipulated by the US Securities and Exchange Commission (SEC).
As the country’s securities watchdog, the SEC formulated new rules to amend the regulations initially formulated in 2009 by tightening requirements for crypto exchanges expanding to custodian services.