Despite uncertainties regarding crypto being prevalent across banks in Germany, there is a rising concern about being left out on a possibly game-changing development.
German Banks Embrace Cryptocurrencies
German banks have largely ignored the crypto industry since they consider them significantly risky, excessively speculative, and extremely unregulated. The situation has left cryptocurrency fintech organizations emerging with increased usage in providing services such as business account management, issuing ATMs and cards, and tokenization. Examples include Bison App, Bitwala, and Bitpanda.
It is impossible to trade cryptocurrencies in any German bank directly. This also applies to major online banks, such as ING and ComDirect, that permit trading these currencies directly through an intermediary. Using certificates resembling cryptocurrencies is the only means for these banks’ clients to invest in Bitcoin and other coins. However, there is a gradual end to the unwillingness of German banks to accept crypto. So far, more institutions are creating solutions aimed at providing access to cryptocurrencies by clients.
Is Bitcoin Leading Crypto Uptake Among the German Banks?
In March 2023, Deutsche WertpapierServiceBank (Dwpbank) undertook a crucial initiative by introducing the wpNex cryptocurrency trading platform to provide digital asset access in 1200 banks and savings banks across Germany. Nevertheless, it is still important to consider the manner in which associate banks will embrace the offering and if it will meet expectations.
Heiko Beck, Dwpbank’s chief executive officer, revealed to Cointelegraph that besides the institution’s pilot client MLP banking, there are close contacts with DZ bank, the nation’s second-biggest bank in terms of assets. He also claimed that the client base comprises other interested entities but did not reveal who.
Institutional Clients Entice Commercial Banks into Crypto
DWS, an asset management group whose majority owner is Deutsche Bank, seeks a means into the cryptocurrency business by providing digital assets access to investors. In April, it was announced that it partnered with Galaxy Digital to work on exchange-traded cryptocurrency products across the European market.
Besides, there are plans to utilize the partnership to create additional digital solutions that will enhance access to digital assets and blockchain by investors.
In April, DWS’s chief executive officer Stefan Hoops posted a quote on LinkedIn claiming that most crypto coins are fraudulent and worthless. However, there is a belief in having a tokenized economy in the future that will significantly alter the present structure of the market.
Hoops claims that his intervention is based on investors’ unabated interest in digital assets. He also claimed that creating safe access to digital assets is critical instead of showing joy after losing a client’s money via dishonest entities.
The recent partnership between Galaxy Digital and DWS indicates that one of the nation’s biggest traditional financial institutions shows interest in crypto assets. However, the offering only focuses on institutional investors rather than retail investors. Examples include foundations and companies.
More banks like DekaBank and Commerzbank are approaching the Federal Financial Supervisory Authority (BaFin) to acquire crypto licenses. The plans are focused on institutional clients and might not necessarily consider famous cryptocurrencies. For instance, DekaBank focuses on digital securities using its blockchain technology and intends to introduce a tokenization platform by next year. Nevertheless, the German Savings Banks Association decided not to provide cryptocurrencies to retail clients last year.
Like Commerzbank, Deutsche Bank focuses on a crypto custody solution to serve big institutional customers. This is an indicator that, in the future, investment funds or pensions will be capable of using the bank to store crypto. Nevertheless, private or corporate clients will not likely benefit from crypto services or products anytime soon.
Retail Clients Benefit from Cooperative Banks’ Crypto Services
A global bank like Deutsche Bank might struggle to introduce a digital asset offering. This is because of the different regulatory jurisdictions of operations. On the other hand, regional banks possess higher freedom. Examples of these banks include savings banks and mid-sized cooperatively organized institutions, for instance, raiffainsenbanken. This high degree of freedom is linked to a simpler mobile structure and being locally based.
Currently, there are efforts by the National Association of German Cooperative Banks to provide an offer for crypto custody and trading for cooperative banks. This will play a vital role in ensuring that they do not reveal themselves to the demand in the market. The institutions will decide if Volksbanken will provide crypto trading to clients.
SureTradeGroup.com is not responsible for the content, accuracy, quality, advertising, products or any other content posted on the site. Some of the content on this site is paid content that is not written or posted by our writers or editors and the opinions expressed do not reflect the opinions of this website. Any disagreement you may have with brands or companies mentioned in articles will need to be taken care of directly with those specific brands and companies. The responsibility of anyone who may click links in our articles and ultimately sign up for that product or service is their own. Forex, Stocks, Cryptocurrencies, NFTs and Dogital Tokens are all a high-risk asset, investing in them can lead to losses. Readers should do their own research before taking any action.