Leading Bank in Germany to Offer Crypto Custody Services

Landesbank Baden-Württemberg, the largest federal bank in Germany, is set to introduce cryptocurrency custody services in the latter half of 2024. Collaborating with Austria’s Bitpanda cryptocurrency exchange, the bank aims to cater to the growing demand for digital asset custody among its institutional clients.

Jürgen Harengel, managing director of corporate banking at Landesbank Baden-Württemberg, highlighted the increasing interest from corporate customers in digital assets, prompting the bank to venture into crypto custody solutions.

German Bank Partners with Bitpanda

The bank plans to leverage Bitpanda’s institutional custody platform, Bitpanda Custody, which offers decentralized finance (DeFi) capabilities and is regulated by the United Kingdom’s Financial Conduct Authority (FCA).

This move by Landesbank Baden-Württemberg reflects a broader trend among German banks toward embracing cryptocurrency services. Deutsche Bank has been exploring digital asset custody services since September 2023, collaborating with Swiss crypto startup Taurus.

DZ Bank Also Ventures into Crypto

Additionally, DZ Bank, Germany’s second-largest bank, announced its intention to pilot a crypto trading platform later in 2024, following the launch of its digital asset custody platform in November 2023.

These initiatives align with the forthcoming Markets in Crypto-Assets (MiCA) regulatory framework, set to come into full effect in December 2024. MiCA represents the first comprehensive legal framework for the crypto industry in the European Union (EU), aiming to regulate crypto exchanges and other crypto asset service providers (CASPs).

Financial institutions and Crypto 

Vyara Savova, senior policy lead at the European Crypto Initiative, emphasized that MiCA’s implementation will subject crypto exchanges to full regulation, marking a significant milestone for the industry. 

“2024 is the year of MiCA, and the whole EU will now have a comprehensive legal framework for crypto-assets, crypto-asset services, and crypto-asset service providers (also known as CASPs). Crypto exchanges are a type of CASP under MiCA and will become fully regulated in December 2024,” said Savova.

MiCA to Bring Clarity

The ongoing consultations, particularly regarding reverse solicitation guidelines, will shape how exchanges outside the EU can offer services to EU citizens without a license and how these services are marketed in Europe.

Overall, the impending regulatory framework under MiCA is expected to bring clarity and legitimacy to the crypto industry in the EU, paving the way for regulated and compliant operations in the digital asset space.