40 German banks apply to offer crypto custody services
Over 40 German banks have applied for the new crypto custodian license necessary for the provision of professional custody services, a clear sign that German financial institutions want to be part of the growing crypto asset industry.
The new license
More than 40 financial institutions have already applied for the new crypto custodian license, according to a report by the German newspaper Handelsblatt that cites the german regulator BaFin as a source. The new license will become a requirement to store digital assets on behalf of clients by November 2020.
The ability for German banks to store crypto assets is a direct result of a new anti-money laundering (AML) law that Germany passed at the start of the year to comply with the new EU Anti-Money Laundering Directive (5AMLD).
"The previous business models that were too lax when identifying customers must be adjusted or discontinued," the German financial regulator told Handelsblatt. By creating a regulated environment for digital asset product and services providers, the regulator believes it will be able to entice legitimate crypto business to set up shop in Germany.
Frank Schäffler, a member of parliament and Germany’s liberal democrats, is excited about the high number of institutions that have applied to offer crypto custodianship. He told Handelsblatt: "The [crypto asset] market is growing faster than the Federal Ministry of Finance has predicted. It is both a blessing and a curse. The high demand for crypto custody licenses shows that companies are increasingly adopting blockchain technology, but is also the result of the new legislation.”
German companies that are active in the digital asset ecosystem seem to be optimistic about the new crypto custody laws.
Michael Offermann, Managing Director of Blockchain Factory at Berlin-based solarisBank, for example, told _Handelsblatt_: ”We have been dealing intensively with crypto custody for a year and a half. The new regulation in the new Money Laundering Act is a good time to start.”
“Digital assets will fundamentally change the financial markets. As soon as the purchase and custody of Bitcoin becomes easier, we expect to see strong growth," he added.
Martin Kassing, founder, and CEO of Upvest, a Berlin-based startup that focuses on real estate asset tokenization, told Brave New Coin: “We welcome the new crypto custody license requirements in Germany as the respective regulatory certainty will make the country a winner in global blockchain adoption. Berlin is already a strong tech hub that is further strengthened by this development.”
“Secure and scalable custody is the prerequisite for distributing volume on-chain. Thanks to the new custody offerings we will also see the first digital asset exchanges in Germany. As one of the leading providers of digital asset custody and tooling, Upvest benefits from the increased international attention,” he added.
Germany is doing a lot of things right when it comes to embracing blockchain technology and crypto assets. It is, therefore, no surprise that Berlin is emerging as one of Europe’s leading blockchain hubs.
OhNoCrypto
via https://www.ohnocrypto.com
Alex Lielacher, Khareem Sudlow