DekaBank Receives Crypto Custody License in from BaFin and ECB

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As a seasoned crypto investor with a keen eye for regulatory developments and institutional adoption, I find the news of DekaBank securing a cryptocurrency custody license from BaFin and ECB a significant step forward. Having closely followed the German banking landscape for years, it’s clear that this move puts DekaBank at the forefront of digital asset services in the country.

DekaBank has been granted a cryptocurrency custody license by both BaFin and the European Central Bank in Germany, broadening its involvement in digital assets and expanding its operational scope within the EU’s crypto market.

DekaBank recently obtained a cryptocurrency storage permit from German regulatory body BaFin and the European Central Bank (ECB), marking a substantial advancement within the crypto realm. Interestingly, Commerzbank became the first bank in Germany to secure this license last year; however, similar to other major banks, DZ Bank currently does not hold this specific permit.

Besides the 11 other crypto custody licenses issued by BaFin to crypto-related companies, notable examples include Hauck Aufhäuser Lampe Privatbank and its subsidiary specializing in digital asset custody. However, it’s important to note that unlike these firms, DekaBank and Commerzbank are regulated under the Banking Act (KWG).

As an analyst, I’m noting that DekaBank has secured its second new license this year, specifically in July when it was approved as a crypto securities registrar. Additionally, it possesses a license that empowers it to manage digital securities based on Distributed Ledger Technology (DLT). Remarkably, these digital securities do not require a Central Securities Depository (CSD) for their holding.

DekaBank Leads Germany in Digital Asset Services with New License

It should also be noted that DekaBank has participated in the provision of services related to digital assets. It established the blockchain platform for the digital securities SWIAT. SWIAT’s investors are Standard Chartered and LBBW. In September, the company used the platform to launch a digital bond worth €300 million Siemens.

To put it simply, a crypto custody license isn’t necessary when handling crypto securities, but it is essential for managing traditional cryptocurrencies. Obtaining this new license gives DekaBank the ability to operate across the European Union under the MiCAR legislation’s jurisdiction on crypto. The aim of the new regulation is to establish order in the EU’s cryptocurrency market, making it safer and more dependable.

For German financial institutions, the question remains unanswered as to when the Supervision of Crypto Markets Act, or KMAG, will be fully implemented. In October 2023, Germany proposed a draft of this act, planning to replace its current crypto regulations with MiCAR. At that time, the law had not been finalized, and the ruling coalition disbanded, leaving uncertainty about when the legislation would be completed. However, predictions suggested the law would pass by the end of the year. This prediction proved accurate when, on December 18, 2024, the German parliament passed the bill into law.

As a crypto investor, I’m excited about the recent development where KMAG’s passage enables DekaBank to fully support its European operations in compliance with local and EU regulations. This move signifies a significant stride for traditional financial institutions aiming to tap into the thriving digital asset market, indicating a promising future for both traditional and crypto markets.

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2024-12-23 19:26