Frankfurt-headquartered Deutsche Bank has applied for a digital asset license from Germany’s financial market regulator, BaFIN, according to a report by Bloomberg today (Tuesday). If approved, the license will allow the banking giant to offer custody services for digital assets, including cryptocurrencies.
Deutsche Bank Jumps into Crypto
“We’re building out our digital assets and custody business,” Deutsche Bank’s Head of Commercial Banking Unit, David Lynne, said in a conference, confirming that “we just put our application into the Bafin for the digital asset license.”
The corporate division of Deutsche Bank has been hinting about its plans to enter the crypto industry since 2020, but it never gave a timeline. Interestingly, a report published by a German bank in early 2020 criticized Bitcoin for not being reliable to store value due to its volatility.
Lynne further elaborated that Deutsche Bank’s corporate banking division’s interest in digital assets came as a part of its broader strategy to increase the fee income. It is following the footsteps of the investment arm, DWS Group which is offering digital asset-lined services and resulting in an increase in income.
Deutsche Bank received € 1.9 billion in pre-tax profits in the first quarter of 2023. The profit jumped 8 percent and generated revenue of € 7.7 billion, which climbed 5 percent. Revenue of its corporate banking division jumped 35 percent to €2 billion.
Mainstream Interest in Crypto
Apart from Deutsche Bank, several other banking and mainstream financial industry giants dived into the cryptocurrency space, mostly with increasing interest in the asset class among retail and institutional investors. Wall Street’s JPMorgan, the current CEO of which once trashed Bitcoin as “fraud,” is providing its institutional clients access to multiple crypto funds.
Most recently, BlackRock, which is the world’s largest asset manager with over $10 trillion in assets under management (AUM), filed for the approval of a spot Bitcoin exchange-traded fund (ETF) from the US’ securities market regulator.
This article was written by Arnab Shome at www.financemagnates.com.
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