Germany has officially entered a recession after two consecutive quarters of negative growth. The country particularly took a hit after the Russia-Ukraine conflict, due to its reliance on Russian energy. However, according to reports, German banks are now getting comfortable with crypto.
However, direct crypto trading is not allowed at German bank branches. Even the largest financial institutions, such as Comdirect, Deutsche Kreditbank, or ING, forbid their clients from trading cryptocurrencies via a broker. Customers of these banks can only invest in cryptocurrencies through certificates that are exact copies of those currencies.
However, the hesitation of German banks to accept cryptocurrencies is slowly fading. More organizations are developing strategies to enable client access to cryptocurrencies.
With the introduction of its wpNex cryptocurrency trading platform in March 2023, Deutsche WertpapierServiceBank (Dwpbank) made a significant advancement. With this change, 1,200 banks and savings institutions in Germany now have access to the digital asset market. But it’s unclear how affiliate banks will react to the offering and whether it’ll meet expectations.
For its large institutional clients, Deutsche Bank focuses on cryptocurrency custody solutions. This means that in the future, investment or pension funds will be able to keep their cryptocurrency at Deutsche Bank. However, the bank won’t be providing any cryptocurrency-related goods or services to business or private customers any time soon, though.
Will Germany actually cozy up to crypto?
With the country entering a recession, it is questionable if banks would like to invest in risky assets such as cryptocurrencies. It is possible that the country wants to be prepared for the future, and is hence taking steps to ease the transition into crypto investments. However, how institutional players react to the development is yet to be seen. Given the economic environment, it is possible that Germany may see a slower adoption of digital assets.
Nonetheless, there is no denying the popularity of digital assets. Moreover, as client demand increases, German banks may soon start to offer crypto services to retail customers as well.