As the cryptocurrency sector expands throughout the globe and across industries, financial institutions are seeing a surge in customer demand for secure and regulated crypto-related services and investments.
Commerzbank, situated in Germany, is one of the banks that has taken the initial steps toward delivering digital asset-related services, and has announced its application for a licence from the country’s Federal Financial Supervisory Authority (BaFin) to operate a crypto custody company.
Commerzbank’s spokesman said specifically that the bank “applied for the crypto custody licence in the first quarter of 2022,” as Börsen-Zeitung reported on April 14.
Indeed, the government issues BaFin licences to financial institutions that want to store and exchange digital currencies on behalf of their customers. This licence has been required to do commerce with cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) from January 1, 2020. (ETH).
Those who choose to conduct regulated financial services without the required licence face a criminal penalty of up to five years in jail. The legislation, however, has substantial transitional protections for entities that were already performing comparable activities prior to the directive’s implementation.
Commerzbank, which serves approximately 28,000 corporate client groups and close to 11 million private and entrepreneurial customers in Germany, plans to target institutional clients with the proposed crypto custody services.
By submitting an application for a licence to act as a crypto custodian, it has joined a lengthy list of institutions vying for the licence. According to the financial authority, it has already received 25 licence applications and accepted four of them.
Coinbase is the first business to get a crypto custody licence in Germany in January 2021. Commerzbank is the first bank to apply.
Banks broaden their reach as demand increases
Additionally, banks worldwide are increasingly interested in extending their services to include cryptocurrency. As Finbold previously reported, one of them is the financial behemoth Goldman Sachs, which wants to provide cryptocurrency services for its high-net-worth clientele in the second quarter of 2022.
Additionally, Credit Suisse board member and fintech specialist Blythe Masters stated that Bitcoin posed no danger to fiat money or the banking industry. On the other hand, some cryptocurrency specialists anticipate that cryptocurrencies will eventually make some financial services ‘irrelevant.’
Also Read: Regulating Crypto Is A Priority Issue For India, According To The IMF
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