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Custodial license applied for: Commerzbank is pushing into the crypto business

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If you want to provide crypto services in Germany, you first have to knock on the door of BaFin. The financial regulator has a strict hand on the coveted crypto custody licenses, for which only Coinbase Germany, Kapilendo and Tangany were able to qualify. Commerzbank is also the first major financial institution to officially seek a license – and thus indicates the reorientation on the crypto growth market.

Commerzbank applies for crypto custody license

After years of regulatory vacuum, the crypto custody business was cast into German law at the end of 2019 with the law implementing the amending directive to the fourth EU money laundering directive. Since then, anyone who stores crypto assets for third parties needs a crypto custody license. The demand so far: manageable. Just 28 applications were received by the authority by the end of last year. With the Commerzbank, a heavyweight in the banking industry is also among the applicants, such as the Stock exchanges newspaper first reported.

A step that is “extremely positive for the entire blockchain ecosystem in Germany”, comments Dr. Sven Hildebrandt, managing director of the blockchain special consultancy DLC, the advance towards BTC-ECHO. After all, Commerzbank is “the first time a major bank has dared to take cover”.

And probably not the last time. “I am convinced that this will only be the beginning of a large wave of reports,” says Hildebrandt. “It is only a matter of time before the last major bank offers its customers cryptos,” says the blockchain expert.

“Race within the traditional banking sector”

Mikkel Morch, Executive Director at the crypto hedge fund ARK36, also agrees.

“Recently, reports of banks applying for a crypto license in countries with advanced regulatory regimes that allow it have been piling up. Whereas until recently, traditional and large banks viewed cryptocurrencies as competition and shied away from them, we are now seeing even some of the most conservative players in the banking sector embrace them.”

According to Morch, these developments “mark the beginning of a race within the traditional banking sector”. Established banking houses “gave a competitive advantage” with crypto services. From both a technological and a marketing perspective, crypto has become “the next big thing.”

Change of mind or compulsion to act?

As a result, “cryptocurrencies would catch on even faster than regular financial services.” In addition, the project illustrates “that the demand for cryptocurrencies across the spectrum of bank customers is already so great that it is forcing companies that have previously been opposed to cryptocurrencies to completely change course”.

A pointer in the direction of Commerzbank, which in early 2021 in an “Insight Report” spoke of a “minimal economic benefit” of digital currencies, denied BTC an “ideal value” and compared the crypto market with the “shell game on the street”. With the application, the banking giant has made no less than a 180-degree turn.

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All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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