German Banking Giant Commerzbank Submits Application for Local Crypto Custody License

If the license application is accepted, Commerzbank (CBK) would be authorized to offer trading and crypto asset services.

Germany’s Commerzbank applied for a crypto license earlier this year, a spokesman for the bank said. This makes it the first major bank in Germany to adopt cryptocurrencies.

• A bank spokesperson said Commerzbank wants to help shape emerging digital ecosystems, especially with regard to custody and trading in non-physical assets.

• “To this end, we entered into a cooperation with Deutsche Börse and Fin-Tech 330x in spring 2021. In addition, we are pursuing our own digital asset strategy and are also planning our own offerings for our customers in the coming years. We have applied for a license from the Bafin for the safekeeping of crypto assets. The future offer is initially aimed at institutional customers,” said Bernd Reh, senior spokesman, Commerzbank.

• Local media outlet Börsen-Zeitung first reported that a spokesperson from the bank confirmed on April 14 that it “applied for the crypto custody license in the first quarter of 2022.”

• The application is to get authorization to offer exchange services along with custody and protection of crypto-assets.

• Commerzbank is Germany’s second-largest listed bank and is partly owned by the government.

• Germany had brought in a new law, effective Jan. 1, 2020, that would encourage German banks to offer crypto services. The law required any business seeking to offer crypto services in Germany to seek a license from BaFin, Germany’s Federal Financial Supervisory Authority.

• BaFin has received 25 applications for approval as a crypto custodian so far but has only approved four so far.

• Speaking about the development, Mikkel Morch, executive director at crypto/digital asset hedge fund ARK36, said this could be interpreted as “the beginnings of a race within the traditional banking field to gain a competitive edge by being the first entity in its local market to offer crypto services” and that “demand is so high across the whole spectrum of banking clients that it compels entities that were previously hostile to crypto to completely change course.”