Several Regulated Banks in Germany Show Interest In Offering Crypto-based Custodial Services
Earlier this year, the German government brought a new law that allows financial banking institutions to provide cryptocurrency services provided they receive a license from the country’s financial regulator BaFin.
Recently, almost 40 financial institutions reached out to BaFin showing their interest in offering cryptocurrency services. This expression of interest comes as part of the new German Money Laundering Act which came into effect earlier this year. The Act allows financial institutions to offer its customers digital currency services along with traditional investment products like stocks and bonds.
A BaFin spokesperson said that expression of interest doesn’t mean that it is an application for permission. Besides, the regulator also added that by just showing their interest, the financial institutions won’t be immediately getting the acknowledgement for a receipt.
In December 2019, the Berlin-based Solarisbank became the first financial institution to offer crypto services through its new subsidiary Solaris Digital Assets. The financial institution said: “As a subsidiary of Solarisbank AG, Solaris Digital Assets plans to fulfill the regulatory requirements of the German market and ensure the compliant storage of digital assets, so that partners do not have to apply for a license themselves”.
Solaris Digital Assets has applied for a custodial license from BaFin as the bank plans to offer Bitcoin and other crypto storage services to its customers. Michael Offermann, Managing Director for crypto banking activities at Solarisbank said: “We have been dealing intensively with the topic of crypto custody for a year and a half … The new regulation in the new Money Laundering Act is a good time to start practically. After all, we are not a research institute, but a commercial bank”.
Looking to the potential use-cases of digital assets, an increasing number of financial institutions are showing interest in offering crypto-related services. Thus, regulators across the globe are making a few amendments to the existing laws to accommodate crypto-related services in their respective jurisdictions.