If the license application is approved, the bank would start offering exchange and crypto services.
At the beginning of 2022, Commerzbank (CBK) of Germany made an application for a crypto license. This means it is the first bank in Germany to make the big and bold move towards crypto adoption.
According to Commerzbank spokesperson, Bernd Reh, the bank targets to shape the emerging crypto ecosystems, especially in custody and non-physical assets trading. Reh further added that they had already entered into a partnership with Fin-Tech 330X and Deutsche Borse in 2021. This is helping the bank to pursue its own digital asset strategy, which includes planning what offers will be put forth for clients in the coming years.
The license that the bank is seeking is for the safe storage of crypto assets. Reh added that the initial targets are institutional clients.
The Growing Demand for Crypto Operations in Germany
The report about the license application was first released by outlet Börsen-Zeitung, a local media outlet, on April 14th. Commerzbank is the 2nd largest listed bank in the country and is partly owned by the German government.
Germany drafted a new law, which came into effect in January 2020, to encourage banks to consider crypto services. According to this law, any enterprise targeting cryptos in the country has to get approval from Germany’s Federal Financial Supervisory Authority (BaFin).
So far, BaFin has acknowledged receipt of 25 applications, but only four have been approved to act as crypto custodians.
According to Mikkel Morch, the executive director at crypto asset hedge fund ARK36, this marks the start of a race in the conventional banking system to get a competitive edge in crypto services. The demand for cryptos from clients is so high in the sector, which was initially hostile to cryptos.