Digital Assets: German Banks Line Up for Licenses to Offer Crypto-Custody Services

https://dailyalts.com/wp-content/uploads/2020/02/bitcoin-2947949_640-german-banks.jpg

The catalyst: A recent amendment of German AML classifying crypto-custody as a financial service.

About 40 banks have applied to Germany’s Federal Financial Supervisory Authority, or BaFin, for licenses to operate custody services for digital assets. (Coingeek)

Bafin last month released new guidelines that will impact firms offering or intending to offer custody services for digital assets such as cryptocurrencies and tokens. Effective January 1, 2020, depository or custody services for crypto assets stand classified as a financial service under the German Banking Act.

A ‘crypto depository service’ is “the safekeeping, administration and securing of crypto assets or private cryptographic keys which are used to hold, store or transfer crypto assets, for others (crypto depository service).”

Accordingly, the financial regulation of such entities who offer crypto-custody now falls within the purview of Bafin and anti-money laundering regulations.

Why the rush for approvals?

Banks are eyeing a huge opportunity for custody of crypto assets in the mass market. Prospective investors in cryptos have been deterred by the problems surrounding cryptos’ safekeeping. These include hacking, loss of private keys, and fraudulent operators in the market.

Solaris is among the first banks to apply for a custody license.

“We have been dealing intensively with the topic of crypto custody for a year and a half,” said Michael Offermann, head of crypto banking at Solaris. “The new regulation in the new Money Laundering Act is a good time to start, practically.”

A time limit now comes into force for licensing. Companies that have already been providing crypto services before January 1 have until November 30, 2020, to comply – a kind of “transitional” period. However, they must inform Bafin by March 31 of their intentions to apply for a license. This also applies to foreign companies currently active in these services.

However, entities contemplating entering the field for the first time cannot do so without a license. Once licensed, they would become regulated cryptocurrency custodians.

Related Story:   Digital Assets: Fidelity Digital Assets UK To Provide Bitcoin Custody Services to European Fund                                                

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Alt Insights

January 29, 2020

Venture Capital: The Kobe in “Bryant Stibel & Co”

Venture Capital: The Kobe in “Bryant Stibel & Co”
Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2020/02/52e4dc4a4854ae14ea898579ce203e7c1d22dfe05b53794a732973d6_640.jpg
ESG: Graham Clapp Says ESG-Focus is Creating a New Bubble
February 27, 2020     ESG and Sustainability, News

RWC Partners fund manager Graham Clapp warned that sustainable investing trends are poised to form a possible bubble in the markets. He compared it to the tech boom of the 1990s….

https://dailyalts.com/wp-content/uploads/2019/11/Warren_Buffett_in_2010.jpg
Hedge Fund: Whitney Tilson Pumps Berkshire Hathaway as Top Retirement Stock
February 27, 2020     Hedge Funds, News

Former hedge fund manager Whitney Tilson has called Berkshire Hathaway (NYSE: BRK.A) the to retirement stock. Tilson, who now writes for Empire Financial Research, issued a note this week praising…

https://dailyalts.com/wp-content/uploads/2020/02/money-1084517_640-invesco-etf.jpg
Liquid Alternatives: Invesco Launches New Sterling Corporate Bond ETF With ESG

Invesco, the fund manager with $1.23 trillion in assets under management as of December 31, 2019, has launched in Europe a new, first-of-its-kind, sterling-denominated, corporate bond ETF with an ESG…

https://dailyalts.com/wp-content/uploads/2020/02/cryptocurrency-3423267_640-six-ieomx.jpg
Digital Assets: The SIX Swiss Exchange Buys A Stake in Crypto Trading Platform Omniex
February 27, 2020     Digital Assets, News

SIX Swiss Exchange announced it had struck a partnership agreement last week with San Francisco-based Omniex. The financial terms of the agreement, which also includes the acquisition of a stake…

Scroll to Top