Cryptocurrency News

Germanys Commerzbank Applies For Local Cryptocurrency Licence To Legally Offer Digital Assets’ Services

Commerzbank had applied for the local cryptocurrency licence earlier this year.

Commerzbank, a German bank, has applied for a local cryptocurrency licence. According to a report by local news outlet Borsen-Zeitung, 

Commerzbank is the country’s first major institution to seek such a licence. With approval, the bank will be allowed to provide crypto safeguarding services to its customers and expand its crypto custody offering. 

To encourage regulated enterprises to enter the crypto industry, Germany proposed a new licencing scheme for crypto services in 2020 and an amendment to the EU’s Money Laundering Directive. In January, the bank had sought a licence from BaFin, Germany’s Federal Financial Supervisory Authority.

According to the Borsen-Zeitung report, Bernd Reh, a senior spokesman of Commerzbank, said that in the spring of 2021, the bank had formed a partnership with Deutsche Borse and Fin-Tech 330x to achieve this goal.

The bank is also trying to come up with its digital asset strategy. Reh said that in future, they were planning their offerings for customers. They have applied to the BaFin for a licence to keep crypto-assets safe.

On January 1, 2020, Germany introduced a new law that encouraged all national banks to offer crypto services. 

According to the law, any business that wants to offer crypto services in Germany will have to get a license from BaFin, the Federal Finance Supervisory Authority of Germany. 

To date, BaFin has received 25 applications for approval of cryptocurrency services. However, BaFin has approved only four applications till now.

Commerzbank wants to help shape digital ecosystems that are emerging in the country. The bank would especially like to deal with the custody and trading in non-physical assets.

Experts in the crypto world have also commented on these developments.

Mikkel Morch, executive director at crypto/digital asset hedge fund ARK36, said that Commerzbank’s licence application might signal the beginnings of competition inside the traditional banking field to acquire a competitive edge by being the first business in its local market to offer crypto services. 

The move, according to Morch, will accelerate the adoption of crypto as a mainstream financial service.

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