German banking giant Commerzbank prepares to offer Crypto Custody

As the cryptocurrency market gains traction and acceptance around the globe, demand for crypto-related services in a traditional way is putting pressure on regular banks and financial institutions.

This time we see a move from the German second-largest bank, Commerzbank. The local media outlet Börsen-Zeitung stated that the banking institution applied for the crypto custody license in the first quarter of 2022. In case of approval, the bank would have the authorization to offer custody and protection of crypto-assets, along with exchange services.

Signalling a concern about the emerging digital innovations that come with the cryptocurrency technology and taking a step toward digital assets adoption, Bernd Reh, Commerzbank Senior Spokesman stated:

We are carrying out our own digital asset strategy and are also planning our own offerings for our clients in the coming years

Commerzbank's involvement with blockchain technology and projects is not news as they were recently working on the development of digital marketplaces for existing asset classes, such as art and real estate. Also, the financial institution has been testing transactions with distributed ledger technology (DLT) since 2018.

Commerzbank offers services to over 28,000 corporate client groups and nearly 11 million private and entrepreneurial clients in Germany. The bank is also collaborating with Deutsche Borse and Fintech 360X while also pursuing its digital asset strategy and planning its offerings to its clients.

Banks granted Crypto Licenses

Several other banks have also been granted a license to offer cryptocurrency-related services. These include Russia’s largest bank Sberbank, which was awarded the license to launch its own cryptocurrency by Russia’s central bank despite heavy sanctions on Russia. Some have theorized that cryptocurrency, called Sbercoin, is a convenient way to get past sanctions. 

Bank Leumi, has also announced that it would be the first bank in Israel to enable cryptocurrency trading after announcing a partnership with blockchain company Paxos. 

Meanwhile, in Australia, the Commonwealth Bank of Australia also announced plans to expand its current offerings of crypto services. 

The recent announcement from the bank was the application for the German Federal Financial Supervisory Authority (BaFin) license for a crypto custody business. According to the bank’s representatives, the bank had applied for the license in the first quarter of 2022. Worth to point out that Commerzbank still has to wait on approval from regulators. Currently, there are at least 24 other companies that applied for a crypto custody BaFin license and are still on the waiting list.

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