Deutsche Bank has made an application to the German finance regulator, the Federal Financial Supervisory Authority (BaFin), for a license to operate a digital asset custody platform, according to a report by Bloomberg. During a conference, David Lynne, Deutsche Bank's global head of corporate banking, stated that the bank is actively expanding its digital assets and custody business. He confirmed that they have submitted an application to BaFin for a digital asset license.
Deutsche Bank has been working on developing a crypto asset custody platform since late 2020. Their goal is to establish a "minimum viable product" in 2021 while assessing global client interest for a pilot initiative.
As the largest bank in Germany with assets valued at $1.3 trillion, Deutsche Bank holds a significant position in the European banking sector as the ninth largest bank.
This move towards digital asset custody represents a notable shift for Deutsche Bank, considering its previous stance on Bitcoin. In a 2021 research note, the bank described Bitcoin's value as being solely based on wishful thinking.
Germany has generally shown a positive attitude towards the cryptocurrency industry. In 2019, German lawmakers introduced legislation to enable crypto custody and trading services across the country's banks and licensed institutions by amending the European Union's Fourth Anti-Money Laundering Directive.
BaFin has issued four licenses for crypto custody and provisional permits to 14 institutions as of December 2022. Coinbase Germany became the first company to obtain a BaFin license for operating a crypto custody platform in June 2021.
Recently, in March 2023, German regulators granted custody and trading services licenses to Boerse Stuttgart Digital, the stock market operator in the country, and Finoa, a cryptocurrency trading platform. These developments highlight the increasing acceptance and adoption of digital assets in the German financial landscape.
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