TronWeekly

Crypto World News

You are here: Home / Archives for Bafin

Bafin

Deutsche Bank Crypto Dive: Seeks Regulatory License For Digital Asset Custody Services

by

In a bold move to diversify its revenue streams and tap into the growing crypto market, Deutsche Bank, Germany’s largest banking institution, has submitted an application to the German Federal Financial Administration (Bafin) for a regulatory license to offer custody services for cryptocurrencies. 

The bank’s strategic foray into the world of digital assets is part of its broader plan to boost fee income within its corporate banking division.

With total assets amounting to a staggering EUR 1.337 trillion in the fourth quarter of 2022, Deutsche Bank has long been recognized as a formidable player in the financial industry. 

Now, it aims to capitalize on the burgeoning popularity of cryptocurrencies and provide its clientele with a secure and reliable platform to store and manage their digital assets.

David Lynne, the head of Deutsche Bank’s commercial banking unit, announced the institution’s intentions during a recent conference, stating:

We’re building out our digital assets and custody business. We just put our application into Bafin for the digital asset license.

He was referring to Bafin, Germany’s securities watchdog responsible for regulating financial institutions.

This move follows the footsteps of Deutsche Bank’s investment arm, DWS Group, which has also been exploring opportunities to expand its revenue streams by offering products and services related to digital assets. 

The bank aims to leverage its extensive expertise and market presence to cater to the increasing demand for secure and efficient cryptocurrency custody solutions.

Deutsche Bank’s corporate banking division had initially hinted at plans to enter the digital asset custody market back in late 2020. However, specific details regarding the timing of the service launch remained undisclosed. 

The division was formerly led by Stefan Hoops, who assumed the role of CEO at DWS Group a year ago, paving the way for David Lynne to take over.

Revenue Concerns In Deutsche Bank’s Investment Bank Division Amid Crypto Ventures

Recent news regarding Deutsche Bank’s investment bank division suggests a challenging second quarter. During a recent financial conference, James von Moltke, the bank’s finance chief, revealed that the division’s revenue is likely to decrease by at least 15% compared to the same period last year. This projection surpasses the expectations of analysts, who had previously estimated a 10% drop.

Nevertheless, von Moltke expressed optimism about the bank’s outlook, describing it as “reasonably favorable.” Deutsche Bank remains committed to navigating the evolving financial landscape and adapting its business strategies to capture new opportunities, such as the emerging market for digital assets and cryptocurrencies.

Related Reading | Mastercard Enhances Crypto Integration Through Trademark Registration

Coinbase’s Germany Arm Gets Approval From Germany’s BaFin

by

The New York-based cryptocurrency exchange, Coinbase has announced receiving a crypto custody license from Germany’s Financial Supervisory Authority [BaFin]. Under the new licensing regime, Coinbase will now be able to continue serving the German market.

In addition, the license of the country’s chief regulatory body would also enable the cryptocurrency exchange to serve as a custodian for other crypto offering businesses and services. According to the official press release, Coinbase has now become the first company to receive the license,

Following the development, Marcus Hughes, Coinbase’s Managing Director for Europe was quoted saying,

“Being awarded the licence is the culmination of many months of hard work from the Coinbase team, in close collaboration with the BaFin. We look forward to bringing a best-in-class crypto product offering coupled with a secure, localised experience to our German customers.”

The Bundestag, the German parliament, had passed a law in November 2019 that needed companies offering cryptocurrency custody for its citizens to apply for a crypto custody license or leave the country. As a result, the Nasdaq-listed crypto platform had applied for the license later next year.

Coinbase expansions intact as Binance faces scrutiny

The regulatory clearance from Federal Financial Supervisory Authority [BaFin] comes in the heels of after Coinbase received a green signal from Japan’s regulatory watchdog Financial Services Agency [FSA] to foray into the country’s crypto ecosystem. It is important to note that the US-based public cryptocurrency exchange has managed to expand its footprint across the world rather quickly since going public in the United States with a direct listing in April this year even as its stock has fallen significantly over the same period.

The same cannot be said for its competitor Binance which has been facing significant challenges in several countries. Over the past week, the cryptocurrency exchange has suffered a crackdown from Japan, UK, and Canada regulators regarding its operations in the respective countries.

Germany Clarifies Bitcoin As Financial Instrument and Crypto Custodians as Financial Institutions

by

EU’s Top financial authority, Bafin is reportedly recommended bitcoin as financial instruments and the crypto custodians as the financial instruments.

The recommendation was made following the AMLD5 ( fifth EU Money Laundering Directive) which rolled early this year. Interestingly, AMLD5 will also have an impact on Germany’s Banking Act and Payment Supervision Services Act. Noticeably, in a press release officially released on March 03, Bafin notes that;

“[A] digital representation of a value that has not been issued or guaranteed by any central bank or public body and is not necessarily linked to a currency specified by law and that does not have the legal status of a currency or money, but is accepted as a medium of exchange by natural or legal persons and can be transmitted, stored and traded electronically”

It was also noted that the new classification that BaFin provides also complies with the guidelines shared by intergovernmental agencies such as FATF (Financial Action Task Force). However, what’s more, interesting is that the agency also recommended crypto custodial platforms.

While Bafin considers crypto custodial providers like financial institutions, it also states that these platforms must obtain a license to continue operating their businesses in the country. More so, it also notes that platforms operating within the country without a license are advised to secure one by the end of November 2020. However, these platforms should also ensure their readiness to apply for a license by the end of this month.

What’s more, the platforms which are operating in other regions should apply for a new license to operate their business in Germany and cannot passport the license of other countries to Germany.

In a nutshell, Germany appears to be a crypto-friendly regulatory region. Consequently, as soon as the country hints its upcoming plan in January, reports rolled the next month, February, noting that almost 40 banks have applied for the license. Besides, stock exchanges including Germany’s second-largest stock exchange, Boerse Stuttgart also showed interest in the crypto ecosystem.