- Commerzbank AG secures Germany’s first full-service bank crypto custody license.
- The license enables broad digital asset services, focusing on crypto assets.
- Marks significant shift in European banks’ approach to the cryptocurrency sector.
Commerzbank AG has secured a cryptocurrency custody license in Germany, as announced on Wednesday by the firm. This permit enables the Frankfurt-based international bank to provide an extensive array of services related to digital assets, focusing especially on crypto assets, according to the announcement.
“Commerzbank is the first German full-service bank to be granted the Crypto Custody Licence pursuant to Article 1 Section 1a Sentence 1 No 6 German Banking Act (KWG). The licence will enable the Bank to build up a broad range of digital asset services, with particular emphasis on crypto assets.”
Commerzbank AG
Securing a cryptocurrency license from Germany’s stringent financial markets regulator BaFin has been a challenging endeavor for firms aiming to provide related services. Commerzbank reports that it is the first comprehensive service bank in Germany to acquire this license and aims to establish a secure platform for managing digital assets.
Commerzbank, through its Chief Operating Officer Dr. Jörg Oliveri del Castillo-Schulz, announced in a press statement that obtaining the license marks a significant milestone for the bank. This achievement underscores their continuous commitment to embracing the latest technologies and innovations. It lays the groundwork for the bank to support its customers in the realm of digital assets.
This development follows the proposal submitted in April of this year. It signifies a careful approach by European banks towards the cryptocurrency sector, moving away from their earlier hesitance stemming from associated risks and worries about possible money laundering activities.
This change is taking place against the backdrop of a recovery in the price of Bitcoin (BTC) after a decline last year, which was caused by the failure of several notable companies and fraud incidents in the industry.
Similar to Commerzbank, other banks are also starting to engage with cryptocurrencies due to customer interest. For instance, Societe Generale SA’s blockchain division was granted the first license under France’s new crypto regulations in July. Moreover, the German cooperative bank DZ Bank AG has recently launched a service for managing digital assets.
In Germany, unlike some other European countries, banks are required to formally extend their licenses to include crypto services, such as custody. This rule provides European banking regulators with a clearer view of the country’s cryptocurrency market.
However, the European Central Bank (ECB) continues to be cautious, concerned about potential gaps that might allow banks to bypass oversight in their crypto-related activities.
The trend towards adopting digital assets and cryptocurrency operations is not just seen in Europe’s banking sector. Globally, more banks are moving in this direction. A significant example is HSBC Holdings, which has integrated blockchain technology into its business processes.
