German-based Commerzbank has taken its initial steps into digital asset services by applying for a crypto custody license.
As the entire global nations explore cryptocurrencies and as the market expands, industries and institutions are trying to get their hands into digital assets.
With the global customers who demand crypto services and investment options rise, banks cannot simply neglect the offer rather than provide a safe and regulated way to invest for the customers.
Commerzbank makes the first move
Commerzbank, a German-based bank, made the first move to enter the crypto realm. The bank announced that it had submitted an application to the country’s Federal Financial Supervisory Authority (BaFin) for the license to run a crypto custody business.
The bank had applied for the license in the first quarter of 2022, as reported on April 14. The Federal authority issues the BaFin license for the financial institutions that wish to store and trade digital currencies for the clients and customers.
Germany had made it mandatory for such institutions to possess the BaFin license to deal with businesses involving cryptocurrencies.
If any institution fails to operate under the regulatory norms and without a license, the penalty will extend to five years in prison. For the financial institutions that started operating before the law came into place, the law gives enough transitional flexibility.
Commerzbank holds a client base of more than 28,000 corporate clients and almost 11 million individual clients. The bank primarily aims to provide crypto services to institutional clients.
The list of the financial institutions applying for the license is soaring. The regulator has already received 25 applications, of which they have already approved four. Coinbase, one of the largest crypto exchanges, was the first company to obtain a crypto custody license in Germany in January 2021.
As the global crypto adoption rises, banks and financial institutions seem to be jumping on the bandwagon to offer their customers regulated crypto services.