Commerzbank, a German financial institution, has secured a crypto custody license from local regulators. This positions Commerzbank as the first "full-service" German bank to be granted such a license under the legal framework of the German Banking Act.
Commerzbank's Plan for Traditional and Digital Assets
The license allows Commerzbank to provide custody services for crypto assets, a capability to offer a range of digital asset services. Jörg Oliveri del Castillo-Schulz, the Chief Operating Officer of Commerzbank, stated that it underscores the bank's keenness to embrace the latest technologies.
Commerzbank seeks to establish a secure platform that complies with local regulations and to leverage blockchain technology to offer crypto custody services to its institutional clients. As the cryptocurrency market gains mainstream acceptance, Commerzbank aims to provide its clientele with services encompassing traditional and digital financial assets.
BaFin Expedites Licensing Approach for Crypto Custody Services
Germany's financial market regulator, BaFin, is set to accelerate its current approach to licensing crypto custody services. BaFin's President, Mark Branson, announced this initiative during the Handelsblatt Banking Summit in Frankfurt, highlighting its significance in instilling confidence among investors amid growing volatility and skepticism in the crypto markets.
The new licensing strategy by BaFin has notable implications for crypto custody providers, signaling a move in response to the crypto landscape. The regulatory body has observed a surge in application processes for crypto custody licenses, completing twice as many in the first eight months of 2023 compared to the entire previous year.
Branson emphasized the importance of the evaluation process. The regulator aims to ensure that only companies with a viable business model, ample start-up capital, and reliable management staff receive permission to operate in the crypto market.
Branson's remarks underscore BaFin's recognition of both the risks and rewards associated with the crypto market. He emphasized the necessity for thorough scrutiny in this sector.
However, BaFin's commitment to regulation does not come without challenges. The regulatory body has recently joined the anti-Binance sentiment, rejecting the company's license application in Germany. Binance has been facing regulatory issues in Europe, exiting Cyprus and the Netherlands amid legal challenges in the United States.
This article was written by Tareq Sikder at www.financemagnates.com.
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