DZ Bank, one of Germany’s largest banks, has decided to launch a Digital Asset Custody platform for institutional clients.
Recently, the traditional financial system has continued its growing trend but this time with the integration of blockchain technology. Many conventional financial institutions are showing interest in cryptocurrency and its associated businesses and innovations. Faced with this new demand, the central institution of the cooperative financial network Volksbanken Raiffeisenbanken commonly known as DZ Bank AG has exploited this trend.
The German bank made the groundbreaking announcement that offering commercial digital asset custody services to institutions will begin operations soon. Notably, this news marked an important milestone as DZ Bank is on track to become one of the first regulated banks in Germany to launch such crypto-related services for organizational customers.
Holger Meffert, head of digital custody and securities services at DZ, expressed the bank’s enthusiasm for distributed ledger technology (DLT):
We assume that within the next ten years, a significant proportion of capital market business will be processed via distributed ledger technology (DLT)-based infrastructures. In the medium term, we see DLT as a complementary technology to the established infrastructures in the existing capital market processes.Holger Meffert stated
The bank also hopes to provide institutional investors and individual customers with a solid basis for purchasing cryptocurrencies such as Bitcoin. To that end, DZ applied for a crypto custody license from the German Federal Financial Supervisory Authority (BaFin) in June 2023.
As part of its new capabilities, DZ BANK can now act as a cryptocurrency custodian for institutional clients, clearing and holding crypto securities under the provisions of the Securities Act German Electronics.