Commerzbank Leads the Way: First German Full-Service Bank to Obtain Crypto Custody License
Commerzbank AG has secured a cryptocurrency custody license, signaling a growing acceptance of the asset class among European banks. This license enables the Frankfurt-based bank to develop an extensive array of digital asset services, placing a particular emphasis on crypto assets, making it the "first German full-service bank" to achieve such accreditation, as stated in their announcement on Wednesday.
This move highlights the cautious entry of European banks into the crypto market, a departure from their initial reluctance due to perceived risks and concerns about potential money laundering. The shift comes amid a rebound in Bitcoin's price, the most well-known cryptocurrency, following a downturn last year triggered by high-profile business failures and fraud scandals within the industry.
Several other banks are following suit, driven by client demand. In July, Societe Generale SA's blockchain unit obtained the first license issued under France's new crypto regulations. Additionally, earlier this month, German cooperative lender DZ Bank AG announced the initiation of a platform for the custody of digital assets.
Unlike some other European countries, Germany mandates that banks secure a formal expansion of their existing licenses for providing crypto services, including custody. This requirement provides European banking regulators with transparency into the country's crypto market through the approval process.
However, the European Central Bank remains vigilant, expressing concerns that some lenders might find ways to evade scrutiny of their crypto businesses. The top oversight official called on legislators on Tuesday to address a loophole in the rules to ensure comprehensive oversight.