Deutsche Bank Reportedly Applies For Crypto License In Germany

Deutsche Bank AG, the German banking giant, has filed for regulatory approval with the country’s financial regulator, BaFin, to offer crypto custody services, per a Bloomberg report on Tuesday.

David Lynne, Deutsche Bank’s Head of Corporate Bank, stated:

“We’re building out our digital assets and custody business. We just put our application into the BaFin for the digital asset license.”

The license application will allow Deutsche Bank to offer crypto services to its customers in the near future. Lynne said the latest regulatory permission is part of a broader strategy to boost fee income and revenue from digital asset offerings. 

Deutsche Bank has long worked to gain a foothold in this market. Recently, DWS Group, the bank’s investment arm, showed interest in digital assets.

In February, DWS Group announced a plan to invest in two German crypto companies as part of the bank’s efforts to revive growth. The bank sought to acquire minority stakes in trading firm Tradias and Deutsche Digital Assets, a crypto exchange-traded products provider.

Deutsche Bank’s corporate bank divisions first hinted at their plans for cryptocurrency custody services in late 2020. Meanwhile, they did not mention when these services would start.

Deutsche Bank released a research paper earlier this year advocating for a stronger regulatory framework for crypto assets. In its research, the bank also cited the collapse of the FTX exchange as justification for implementing stricter regulations.

The German bank now has assets worth $1.34 trillion, making it Europe’s ninth-largest.

German Authorities Welcome Crypto Companies

Germany’s financial regulators have generally been open and receptive to crypto companies. In 2019, European lawmakers launched a bill enabling all licensed German institutions and banks to offer the region’s trading and custody services. 

By the end of last year, BaFin had granted four licenses for crypto custody and issued temporary permits to 14 institutions.

BaFin, the Federal Financial Supervisory Authority, is tasked with overseeing firms in Germany that offer crypto-related services, including cryptocurrency ATM firms and trading companies. However, the license issued by BaFin enables digital assets platforms to advertise and offer their services in the German market legally.

Coinbase Germany, the subsidiary of American cryptocurrency exchange Coinbase, was the first company to receive a BaFin license in June 2021.

Moreover, Commerzbank, Germany’s second-largest bank, also applied for a license to provide crypto trading and custody in Germany in 2022.