Earlier today, the investment banking company Deutsche Bank AG applied for a digital asset license from The Federal Financial Supervisory Authority (BaFin), the financial market regulator in Germany. The license would allow the Frankfurt-based banking giant to provide custody services for digital assets and cryptocurrencies.
According to a report by Bloomberg, Deutsche Bank’s decision to seek regulatory approval was part of its efforts to grow its digital asset business, representing the growing interest from traditional finance institutions towards the crypto industry. The German banking giant tapped the country’s securities watchdog for the same.
David Lynne, head of Deutsche Bank’s commercial banking unit, stated:
We’re building out our digital assets and custody business. We just put our application into the Bafin for the digital asset license.
Lynne further stated that the application for crypto custody services was part of a wider strategy by Deutsche Bank to increase its income from fees earned by its corporate bank. The latest move also mirrored the efforts by Deutsche Bank’s investment arm DWS Group to grow the income from products related to digital assets.
Deutsche Bank’s license application for crypto custody services came nearly three years after the bank’s corporate divisions first hinted at plans to offer digital asset custody. At the time, the division was headed by Lynne’s predecessor Stefan Hoops. Hoops currently serves as the Chief Executive Officer of DWS.
DWS was eyeing two German crypto firms for investment in February 2023. Hoops reportedly held talks to explore the acquisition of a minority stake in Frankfurt-based Deutsche Digital Assets. Bloomberg reported that the other potential target was a firm called Tradias.
Earlier this year, Deutsche Bank’s Singapore arm successfully completed the proof of concept stage of Project DAMA (Digital Assets Management Access) in collaboration with Memento Blockchain. Project DAMA was designed to manage the investment of digital funds in tokenized securities.
