Everyone wants a piece of the pie
Another prime example of the unstoppable success of the crypto business is currently being delivered by major German banks: for years, they warned against the dangerous and highly volatile assets, negated the sense and the earnings potential and categorically denied any involvement in the crypto sector – until it became clear that cryptos do have potential and that it is above all solvent and younger customer groups that are gradually being lost to crypto exchanges. There are even reports of banks refusing to allow their customers to transfer crypto profits to their current accounts and threatening to close accounts if they do not.
Licenses in high demand
Major German banks such as Commerzbank or Deutsche Bank now want to enter the crypto custody business – in view of migrating customers and tempting profits. According to media reports, Commerzbank has applied to the financial supervisory authority Bafin for a license to hold cryptocurrencies in custody. Deutsche Bank also confirmed similar arrangements, and the savings banks also want to start a service for cryptocurrencies this year. The profane reason: The banks want to stop the migration of younger customers to FinTechs with a corresponding service offer. Fintechs have already been successfully offering this service for years – now the banks want to follow suit and initially target institutional customers.
While Commerzbank is pursuing its own digital asset strategy in addition to custody and is also planning its own offers for clients in the coming years, the focus at Deutsche Bank is on international investors, especially funds, pension funds or insurance companies.
However, the banks are lagging behind the US crypto exchange Coinbase with their applications, which already has a Bafin license for the custody and trading of digital currencies in Germany. And as the FAZ reports, the bank Hauck Aufhäuser Lampe (via the acquired fintech Kapilendo) and the Munich fintech Tangany have now also received one of the coveted licenses. According to the FAZ, Bafin now has 25 crypto applications waiting for approval.
Advantage for customers
Despite all the criticism of the banks’ procrastination and opportunism, one must also address the advantages associated with this step: With licensed banks, customers get the security that their crypto deposits are safely stored according to valid standards and are protected against loss. Especially in view of the incidents and sometimes considerable thefts at various providers in the past, the banks’ commitment should be seen as a further lowering of the inhibition threshold to deal with cryptocurrencies and thus strengthen the entire sector.