Deutsche Bank applies for digital asset custody license with BaFin.

Deutsche Bank AG, the biggest banking institution in Germany, has reportedly applied for a license from the German financial regulator BaFin to offer digital asset custody services including cryptocurrencies. According to Bloomberg, this move is aimed at expanding the bank’s revenue streams. This follows a similar shift from the bank’s investment arm, DWS Group, which had shown interest in investing in two German crypto firms, including a crypto exchange-traded products provider and a market maker, Tradias.

The banking giant’s corporate bank division first announced plans to offer digital asset-related services in 2020 but had not revealed a timeline for the introduction of these services. However, Deutsche Bank’s commercial banking unit head, David Lynne, announced on June 20 that the lender is building its “digital assets and custody business” and has applied for a license with the country’s financial regulator.

Despite being critical of Bitcoin (BTC) and the crypto market’s volatility in the past few years, Deutsche Bank’s tone toward the industry has changed in 2023. In February this year, Deutsche Bank Singapore, in partnership with Memento Blockchain, successfully completed trials for a tokenized investment platform called DAMA (Digital Assets Management Access). The digital asset fund was created with its own soulbound token and launched a direct fiat-to-digital on-ramp for users.

German securities processor Deutsche WertpapierService Bank (Dwpbank) has also created a Bitcoin-focused platform, wpNex, for retail customers. The new platform offers crypto accounts alongside bank clients’ other accounts without requiring them to do any additional Know Your Customer processes.

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Germany’s banking institutions have historically kept a safe distance from the crypto industry, citing its volatile nature and unpredictability. However, this stance appears to be changing in 2023 as major banking institutions continue to explore the potential of adding digital asset-centered services for clients.