Banking giant Deutsche Bank has partnered with crypto company Taurus to launch a new custody service for its institutional clients. The bank has been public about its optimistic views on BTC, and the partnership aims to gain a stronger foothold in the nascent sector.
Deutsche Bank Jumps Into Custody, Is Bitcoin Trading Next?
According to a report from Reuters, the banking institution will hold Bitcoin and real-world tokenized assets for its clients. The latter are commodities, equity, or other real-world assets with a digital representation supported by a blockchain platform.
However, the report indicates that Deutsche Bank will stay in the custody business for now, with no plans of pursuing any other related activity with cryptocurrencies. In other words, the bank clarified its lack of intention to launch a Bitcoin trading venue, a spokesperson said.
Reuters indicates that the bank revealed plans to launch a crypto trading platform in 2020. At that time, the price of Bitcoin and other cryptocurrencies was in the early stages of a bull run that saw its value climb from a low of around $3,000 to an all-time high of $69,000.
The long “Crypto Winter,” the collapse of prominent crypto trading platforms, and the high-interest rates environment might have dissuaded the bank’s leadership from following this direction and opting for custody as a more viable alternative to enter the nascent asset class.
Other banking institutions worldwide launched their crypto custody platform, including BNY Mellon, Standard Chartered, and others. The report quotes Paul Maley, Global Head of Securities Services for Deutsche Bank:
As the digital asset space is expected to encompass trillions of dollars of assets, it’s bound to be seen as one of the priorities for investors and corporations alike. Our focus is not just on cryptocurrencies, but supporting our clients in the overall digital assets ecosystem.
Maley emphasized that a warning from US regulators supports their caution in entering the crypto sector. In particular, the US Securities and Exchange Commission (SEC) has been aggressive in its approach to regulating the asset class.
Deutsche Bank received a warning from the US regulators about the “liquidity issues” that could negatively impact the crypto sector. The Deutsche Bank executive added:
(…) in line with the spirit and the letter of the regulations governing this asset class (…) Our product design, and the nature of custody for clients, will make sure that there isn’t the risk of contaminating the bank’s other activities.
As of this writing, Bitcoin (BTC) trades at $26,500 with a 2% profit in the last 24 hours.
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Source: https://bitcoinist.com/bitcoin-btc-deutsche-bank-launches-custody-service/