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Deutsche Bank Boosts Institutional Crypto Adoption with Asset Custody Offer
Deutsche Bank, Germany’s largest bank, with $820 billion in assets under management, has just entered a partnership that enables its institutional customers to hold a limited number of cryptocurrencies.
The bank, which has offices in Sydney and Melbourne, is listed on Stock exchanges in Frankfurt (FWB) and New York (NYSE). The deal was announced by Swiss digital asset technology provider Taurus on September 14 and includes worldwide custody arrangements for cryptocurrencies, tokenized assets, and digital currencies.
Although it was not immediately clear which cryptocurrencies would be included, Taurus co-founder Lamine Brahimi said: “We are pleased to implement this global partnership with Deutsche Bank and look forward to supporting the bank in launching digital assets and DLT-based products and services across several booking centers.”
According to Taurus, it currently ‘provides enterprise-grade digital asset infrastructure to issue, custody, and trade digital assets, such as cryptocurrencies, tokenized assets, NFTs, and digital currencies.’ Deutsche Bank has stated that it currently has no plans to offer crypto trading services.
The bank has historically been reluctant to accept crypto, with its chief strategist, Ulrich Stephan, remarking back in 2017, “I would simply not recommend this to the everyday investor.”
TradFi Held Past Reservations About Crypto
The bank credited its reluctance to the fluctuations and volatility in the crypto market, which it views as making cryptocurrencies a poor choice for long-term investments. Also in October of 2017, CEOs Jamie Dimon of JP Morgan Chase and Larry Fink of BlackRock made statements suggesting governments ought to “crush” Bitcoin.
However, attitudes seem to have shifted since then. In an interview in July 2023, Larry Fink stated that BlackRock now believes it has a ‘responsibility to democratize investing, including crypto.’ Institutional interest in crypto is indeed increasing, with several Spot Bitcoin ETFs pending approval and Cathie Wood’s ARK Invest filing for a Sport Ether ETF.
Deutsche Bank Not the First
Meanwhile, other banks have entered the crypto custody arena. Deutsche Bank’s partnership follows others, such as NASADQ and BlackRock in the United States and New York Bank BNY Mellon, who partnered with Fireblocks and Chainalysis in 2021.
In Europe, institutions like French Societe Generale and Forge have partnered up. Luxembourg-based Zodia Custody, owned by Standard Chartered, began providing crypto custody services to financial institutions in early 2023.
Deutsche Bank itself has shown a shift in its stance towards Bitcoin and cryptocurrencies. In February of 2023, the bank partnered with Memento Blockchain on project DAMA (digital assets management access). DAMA is a digital fund investment servicing platform designed to simplify the launch and administration of digital funds while enabling access to various funds and custody models for investors.
Additionally, Deutsche Bank subsidiary DWS has partnered with Mike Novogratz’s Galaxy Digital to offer ETPs (Exchange Traded Products) which include ETFs and others.
Crypto Outlook Improves
At the same time, the regulatory landscape is slowly changing. While Gary Gensler and the SEC continue their ‘regulation by enforcement’ approach to crypto, changes in U.S. accounting rules are making it easier for companies to hold crypto. These new rules require companies holding crypto on their balance sheets to report all assets at their fair value, i.e., the value an asset was trading for at the time of reporting.
Overall, institutional interest, paired with regulatory developments, paints a positive picture for the crypto industry. And, predictions by investor and entrepreneur Anthony Pompliano add fuel to the fire. In a recent interview with Fox Business’s Liz Claman, he discussed the pending Spot Bitcoin ETF approvals, the Bitcoin halving, and a report about a significant increase in the value of the stablecoin market. The report predicts the total market cap for stablecoins is set to go from currently $125 billion (AU$196 billion) to $3 trillion (AU$4.7 trillion).
Pompliano said: “If that happens, Bitcoin and the rest of the cryptocurrency market will likely be 10 plus trillion dollars. We’re talking about a market that maybe is just over a trillion today.”
Deutsche Bank, Germany’s largest bank, with $820 billion in assets under management, has just entered a partnership that enables its institutional customers to hold a limited number of cryptocurrencies.
The bank, which has offices in Sydney and Melbourne, is listed on Stock exchanges in Frankfurt (FWB) and New York (NYSE). The deal was announced by Swiss digital asset technology provider Taurus on September 14 and includes worldwide custody arrangements for cryptocurrencies, tokenized assets, and digital currencies.
Although it was not immediately clear which cryptocurrencies would be included, Taurus co-founder Lamine Brahimi said: “We are pleased to implement this global partnership with Deutsche Bank and look forward to supporting the bank in launching digital assets and DLT-based products and services across several booking centers.”
According to Taurus, it currently ‘provides enterprise-grade digital asset infrastructure to issue, custody, and trade digital assets, such as cryptocurrencies, tokenized assets, NFTs, and digital currencies.’ Deutsche Bank has stated that it currently has no plans to offer crypto trading services.
TradFi Held Past Reservations About Crypto
The bank has historically been reluctant to accept crypto, with its chief strategist, Ulrich Stephan, remarking back in 2017, “I would simply not recommend this to the everyday investor.”
The bank credited its reluctance to the fluctuations and volatility in the crypto market, which it views as making cryptocurrencies a poor choice for long-term investments. Also in October of 2017, CEOs Jamie Dimon of JP Morgan Chase and Larry Fink of BlackRock made statements suggesting governments ought to “crush” Bitcoin.
However, attitudes seem to have shifted since then. In an interview in July 2023, Larry Fink stated that BlackRock now believes it has a ‘responsibility to democratize investing, including crypto.’ Institutional interest in crypto is indeed increasing, with several Spot Bitcoin ETFs pending approval and Cathie Wood’s ARK Invest filing for a Sport Ether ETF.
Deutsche Bank Not the First
Meanwhile, other banks have entered the crypto custody arena. Deutsche Bank’s partnership follows others, such as NASADQ and BlackRock in the United States and New York Bank BNY Mellon, who partnered with Fireblocks and Chainalysis in 2021.
In Europe, institutions like French Societe Generale and Forge have partnered up. Luxembourg-based Zodia Custody, owned by Standard Chartered, began providing crypto custody services to financial institutions in early 2023.
Deutsche Bank itself has shown a shift in its stance towards Bitcoin and cryptocurrencies. In February of 2023, the bank partnered with Memento Blockchain on project DAMA (digital assets management access). DAMA is a digital fund investment servicing platform designed to simplify the launch and administration of digital funds while enabling access to various funds and custody models for investors.
Additionally, Deutsche Bank subsidiary DWS has partnered with Mike Novogratz’s Galaxy Digital to offer ETPs (Exchange Traded Products) which include ETFs and others.
Crypto Outlook Improves
At the same time, the regulatory landscape is slowly changing. While Gary Gensler and the SEC continue their ‘regulation by enforcement’ approach to crypto, changes in U.S. accounting rules are making it easier for companies to hold crypto. These new rules require companies holding crypto on their balance sheets to report all assets at their fair value, i.e., the value an asset was trading for at the time of reporting.
Overall, institutional interest, paired with regulatory developments, paints a positive picture for the crypto industry. And, predictions by investor and entrepreneur Anthony Pompliano add fuel to the fire. In a recent interview with Fox Business’s Liz Claman, he discussed the pending Spot Bitcoin ETF approvals, the Bitcoin halving, and a report about a significant increase in the value of the stablecoin market. The report predicts the total market cap for stablecoins is set to go from currently $125 billion (AU$196 billion) to $3 trillion (AU$4.7 trillion).
Pompliano said: “If that happens, Bitcoin and the rest of the cryptocurrency market will likely be 10 plus trillion dollars. We’re talking about a market that maybe is just over a trillion today.”
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
