- The decision is part of the bank’s broader strategy to raise fee income for its corporate unit
- German authorities are working on easing crypto lending and staking rules
The all-pervasive regulatory crackdown on crypto by US financial watchdogs hasn’t deterred big European players like Deutsche Bank from furthering operations in the crypto space. Germany’s largest bank has applied for regulatory permission to offer custodial services for crypto and other digital assets, Bloomberg reported, as cited by Coingape.
Wider strategy to increase income from fees
According to David Lynne, chief of DB’s commercial banking unit, the decision is part of the bank’s broader strategy to raise fee income for its corporate unit. In addition, it draws attention to the bank’s efforts to raise income for DWS Group, its investment arm, from services connected to digital assets. Lynne told Bloomberg:
We’re building out our digital assets and custody business. We just put our application into the BaFin for the digital asset license.
BaFin is the financial regulatory authority in Germany responsible for overseeing and regulating banks, financial services providers, insurance companies, and securities trading.
Not a precedent
In 2020, Deutsche Bank also made an attempt to launch digital asset custody services, but it never specified when this would happen. At any rate, demand for such services is increasing in parallel to institutional player participation in the crypto space. Major players like Fidelity and BlackRock are also demonstrating a willingness to enter the space.
When news of Credit Suisse’s troubles surfaced in March, Deutsche Bank faced a major liquidity crisis, but it seems to be recuperating.
Germany is adopting a crypto-friendly stance
German authorities are working on easing crypto lending and staking rules. In 2022, the Bundestag decided to refrain from extending the statutory period to ten years for selling funds from crypto lending and staking without having to pay tax. Currently, Germans can sell gains from staking and lending after a year, tax-free.
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