Deutsche Bank launches custody service for Bitcoin and Ether

Deutsche Bank is to launch a cryptocurrency custody service. Germany’s largest bank will thereby offer institutional and corporate clients the ability to securely hold and transfer Bitcoin, Ether and selected stablecoins. The service is to become available later this year, once the necessary regulatory approvals have been granted. In the longer term, the bank wants to expand the offering with tokenised financial instruments.

In brief:

• Deutsche Bank announces a custody service for Bitcoin, Ether and stablecoins for institutional clients.
• The service will start in Germany after regulatory approval, with plans for tokenised financial instruments.
• The bank is targeting asset managers, hedge funds, brokers and wealth funds.

Digital assets as a complement to the financial system

Gerald Podobnik, co-head of commercial banking at Deutsche Bank, said in an interview that in his view digital assets are not an alternative to the traditional financial system, but a complement to it. “We see them as new rails that can exist alongside the existing market infrastructure, with the trust and protection that regulated financial institutions provide,” Podobnik said.

He added that the service will initially be available to clients in Germany. According to Bloomberg, the bank is also already in the process of selecting a technology provider to build the necessary infrastructure for holding and trading digital assets.

Institutional clients and a broader European trend

With the new service, Deutsche Bank is targeting asset managers, hedge funds, custodians, brokers and sovereign wealth funds. The bank says these parties are used to operating in regulated environments. In addition, the bank also wants to reach institutional clients that are already experimenting with blockchain technology for investments and payments.

The move fits into a broader movement among large European financial institutions. New regulation in Europe and a more favourable climate in the United States are giving banks more room to become active in the digital asset market. Italian banking group UniCredit is also considering expanding its offering in this area, including with custody and brokerage services. It was already apparent earlier that traditional banks and crypto institutions are increasingly operating in each other’s territory.

At the time of writing, Bitcoin is at $75.600, a decline of 0.4% over the past 24 hours. Whether the entry of large European banks into the custody market will influence demand for digital assets in the longer term remains to be seen.