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Commerzbank wants to be the first German bank to have a crypto depository license
Many other banks could soon enter the crypto business
Huge profit potential is increasingly forcing banks to “completely change course”
The traditional German major banks Deutsche Bank and Commerzbank have for several years struggled with increased competitive pressure from online banks such as the N26. The digital transformation of Commerzbank got off to a slow start, resulting in a rapid loss of customers. The bank, which is headquartered in Frankfurt am Main, has recently closed thousands of jobs. To position itself stronger for the future, Commerzbank now wants to be the first German bank to acquire the cryptocurrency license.
Crypto depository license in Germany has only been granted three times so far
So far, according to “BTC-Echo”, only three companies have received a third-party crypto depository license from the Federal Financial Supervisory Authority (BaFin): Coinbase Germany, Kapilendo (subsidiary of Hauck Aufhuser Lampe Privatbank) and Munich blockchain company Tangany. Such a license has been required since 2020 to be able to store, manage and secure Bitcoin, Ether and Co. for third parties. However, the demand for such a permit has so far been manageable. In the first quarter of 2022, however, BaFin received 25 applications – Commerzbank is among those interested, as “Bresen-Zeitung” reported in mid-April.
Commerzbank: First major bank to apply for deprivation of liberty
At Commerzbank, however, an institution from the traditional banking sector is for the first time interested in a German crypto-depository license. This initiative has mostly been positively received by German crypto experts. The step “is to be assessed extremely positively for the entire blockchain ecosystem in Germany,” says Sven Hildebrandt, CEO of the blockchain specialist consulting firm DLC to “BTC-ECHO”. For with Commerzbank, “the first time a large bank dared to take cover”. Commerzbank hopes here for a first mover effect, which will ensure high market shares in the growing crypto business.
Custody license for Commerzbank: “The beginning of a great wave”
However, the competition will not hesitate for a long time to emulate Commerzbank, Hildebrandt suspects. “I am convinced that this will only be the beginning of a great wave of reports,” says Hildebrandt. “It’s only a matter of time before the last major bank offers its (sic) customers crypto,” says the blockchain expert. Consistent with the growing number of long-term Bitcoin holders, cryptocurrencies appear to be gradually maturing into an established asset class. Even banks that have been more conservative so far are less and less willing to close on this profit potential.
Mikkel Morch, CEO of the cryptocurrency hedge fund ARK36, told BTC-ECHO: “While traditional and large banks until recently regarded cryptocurrencies as competition and relegated them, we now see that even some of the most conservative players in the banking sector accept them.” . Morch even predicts “the start of a race in the traditional banking sector”, as “from both a technological and marketing perspective” crypto “has become the next big thing”. Cryptocurrencies are catching up faster than regular financial services, forcing banks to “change course completely.”
U-turn at Commerzbank: still a major cryptocurrency critic in 2021
Such a reversal can also be observed at Commerzbank. In 2021, the bank released a report “Precious Metals Against Cryptocurrencies”, in which it sharply criticized Bitcoin and Co. Instead of a currency, cryptocurrencies open up opportunities for money laundering and terrorist financing – gold, on the other hand, is a much more serious and secure solution. As quoted by “BTC-Echo”, Commerzbank came to the conclusion that “digital currencies are not an alternative to official central bank money, nor to gold or other precious metals”, as “minimal economic benefits” are outweighed by “major disadvantages”. On the basis of these words, the application for the crypto-depository license can be seen as an interesting, telling event for Commerzbank.
However, Commerzbank shares are currently unable to escape the ailing mood in the stock markets and have lost significant value since the Russian attack on Ukraine on 24 February 2022. However, Commerzbank is likely to benefit from any rate hikes. big bank still stands clear in black over a twelve month period.
Gearing must be between 2 and 20
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