Deutsche Bank, one of Germany’s leading financial institutions, is expanding its services into the digital asset space by applying for a regulatory license to operate as a crypto custodian. 

This move follows the footsteps of other traditional finance giants venturing into the cryptocurrency realm. With assets totaling $1.4 trillion, Deutsche Bank aims to offer custody services for assets, like cryptocurrencies.

The decision to pursue a crypto custodian license comes shortly after BlackRock, a prominent asset management company. BlackRock filed with the U.S. Securities and Exchange Commission (SEC) to establish a spot Bitcoin exchange-traded fund (ETF). 

Confirming the news, a spokesperson from Deutsche Bank stated that they have applied for the BaFin license, referring to Germany’s financial regulator.

Deutsche Bank shows its interest in crypto custody.

Back in February 2021, the bank expressed its interest in cryptocurrency custody, aiming to provide a secure storage solution with robust insurance protection. The current move aligns with the bank’s broader strategy to enhance its fee income and capitalize on the growing interest in digital assets. 

David Lynne, Global Head at Deutsche Bank’s Corporate Bank, revealed that the bank is actively developing its digital assets and custody business. 

Deutsche Bank’s future digital asset custody platform is expected to be launched gradually, enabling users to trade digital assets through prime brokers and offering additional services such as taxation, valuation, fund administration, lending, staking, and voting. 

This initiative reflects the bank’s dedication to catering to the needs of corporate clients, financial institutions, investors, and issuers in the evolving digital asset landscape.

While Deutsche Bank is relatively new to the crypto custody space, it has been involved in the crypto industry for some time. Recently, its asset management group, DWS, engaged in discussions to acquire a minority stake in two crypto companies: Deutsche Digital Assets, a provider of exchange-traded products, and trading firm Tradias. These strategic investments complement the bank’s ambition to establish a foothold in the digital asset market.

In parallel, other significant developments have occurred in the crypto custody sector. Ripple, for instance, acquired Swiss custody firm Metaco to expand its international presence and broaden its service offerings. 

Standard Chartered’s Zodia Custody also secured $36 million in funding, led by Japan’s SBI Holdings, while Nasdaq is preparing to launch its own crypto custody services and has applied for regulatory approvals.

Final Words

Despite recent legal challenges and SEC lawsuits involving major crypto companies, Deutsche Bank’s foray into cryptocurrencies demonstrates the ongoing interest and commitment of established financial institutions to embrace the crypto space. 

Notable players, like BNY Mellon, Fidelity, and BNP Paribas, are also actively exploring and participating in the crypto safekeeping service sector. These developments highlight the increasing acceptance and integration of digital assets within the traditional financial industry.