Over 40 banks in Germany have shown an interest in offering cryptocurrency custody services to their clients. These banks have applied for a license with the country’s financial regulator, Germany’s Federal Financial Supervisory Authority (BaFin). Upon approval, they will offer custodial services for cryptocurrencies. This will include Bitcoin, Ether, XRP, etc. to their various clients, according to a local media report.
More Than 40 German Banks Want to Offer Crypto Services
Per the report, more than 40 banks in Germany have shown an interest in offering cryptocurrency services to their clients. Also, these banks have filed a request with BaFin, the country’s financial regulator. Upon requests approval, the banks will become regulated cryptocurrency custodians. Hence, they can keep custody of digital assets including Bitcoin, Ether, and XRP, for their customers.
Further reports reveal that this high number of requests came in the face of the new Money Laundering Act, approved by the German government. The Act came into effect on January 1, 2020, and it allows financial institutions in Germany to offer assets including cryptocurrencies to their clients. Banks can also be custodians of these assets.
Banks Must Obtain a License from BaFin
However, banks that seek to offer these assets have to obtain a financial supervisory license from BaFin. Financial institutions that offer crypto services in the country have until the end of November 2020 to do this. In line with that, institutions looking to start or continue the offer of crypto services have at least until the end of March this year to submit an application to BaFin.
Frank Schäffler, a member of parliament for the Free Democratic Party while making comments remarked that the high level of interest in the country is impressive.
According to Schäffler:
“The market is growing faster than the Federal Ministry of Finance has predicted. This is a blessing and a curse. The high demand […] shows that more and more firms accept blockchain technology, but can also be seen to be a result of the new legislation.”
Germany Classifies Cryptocurrencies as Digital Representation of Value
On the other hand, Germany, in its draft law, classifies crypto assets as digital representations of value. It adds that these assets are neither issued nor guaranteed by the central bank or public body. Also, the country outlines that crypto-assets do not attain the legal status of money.
BitGo, a digital assets financial services firm recently launched a custodial entity in Germany. According to the firm, Germany has become one of the important European centres for digital assets and forward-thinking regulatory frameworks.