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

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.


Latest Alternative Investment News
Digital Assets: Epic Lays Off 830 Employees As Metaverse Underperforms
September 29, 2023     Digital Assets, News

Earlier today, Tim Sweeney, the head of Epic Games, shared an email with the company’s employees, announcing some significant changes within the organization. In this message, Sweeney discussed the necessity…
Artificial Intelligence: Mysterious US-Based Books3 Dataset Used To Train AI Was A Massive Trove Of Pirated Books
September 29, 2023     Artificial Intelligence, Latest News, News

Thousands of books penned by some of Australia’s most esteemed authors may have fallen victim to what Booker prize-winning novelist Richard Flanagan has described as “the biggest act of copyright…銅鑼灣_Causeway_Bay_銅鑼灣時代廣場_Times_Square_office_Tower_One_阿里巴巴_Alibaba_Hong_Kong_June_2022_Px3_03.jpg
FinTech: Ant’s Chongqing Consumer Finance Arm Raising $616M To Ramp Up Loans
September 29, 2023     FinTech, News

Chongqing Consumer Finance, the consumer finance arm of Ant Group, a prominent player in China’s financial technology landscape, is currently in the process of raising a substantial sum of fresh…
Venture Capital: Mercury’s Fund V Mops Up $160M For US Startups “Between The Coasts”
September 29, 2023     News, Venture Capital

Mercury Fund, the premier early-stage venture firm with a focus on non-coastal tech hubs, has successfully closed its largest fund to date, Mercury Fund V, with a total capital commitment…