As the world is witnessing more crypto adoption, especially among the younger generations, quite a lot of companies and financial institutions are under pressure to adopt crypto-related services to improve customer satisfaction.
The German bank, Commerzbank, has taken its first step in the introduction of digital financial asset-related services; the country on Wednesday has announced its filing for a crypto custody business from the country’s Federal Financial Supervisory Authority (BaFin).
The bank’s representative stated specifically that the bank “applied for the crypto custody license in the first quarter of 2022,” as first reported by Börsen-Zeitung on April 14.
Certainly, the authority grants the BaFin license to financial institutions that wish to store digital currencies for customers and also trade them. This license, since January 1, 2020, has been under the mandate for any firm or anyone that wants to do business with cryptocurrencies like Ethereum and Bitcoin. If anyone is caught operating regulated financial services without a proper license, there would be a criminal penalty which can be up to five years in prison; this necessitates the reason for Commerzbank to file for the said license.
However, the law also prescribes generous transitional provisions for organizations that had already been conducting related transactions before the directive came into force.
Commerzbank is known to provide services to about 28,000 corporate client groups and almost 11 million private and entrepreneurial customers in Germany; it intends to offer crypto custody services mainly to institutional clients. By applying for the license to become a crypto custodian, it has joined a long list of institutions trying to obtain it. Meanwhile, the country’s financial regulator announced that it has already received 25 applications for the license so far, and four have been approved.
With Coinbase becoming the first company to earn crypto custody in the country, Commerzbank will be the first financial institution to obtain a license for crypto-related services.
More Banks Considering Crypto-related Services
Various banks across the globe are increasingly showing interest in crypto-related services; the reason for this is an increase in the adoption of cryptocurrencies by the world population and various firms. As reported by Finbold, the banking giant Goldman Sachs is planning to launch its crypto services for its high net worth clients in the second quarter of this year.
Furthermore, a board member and fintech expert, Blythe Masters of Credit Suisse, has defended the fact that Bitcoin was never a threat to fiat money or the banking sector.
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