$740 Billion Deutsche Bank to Launch Crypto Services

Key Insights:

• Deutsche Bank partners with Bitpanda to launch crypto custody service
• Crypto gains more recognition in traditional finance
• The MiCA regulation could limit EU banks from adopting crypto

Deutsche Bank, a German multinational investment bank, is reportedly strengthening its ties with the cryptocurrency industry.

The bank plans to launch a crypto service in 2026, as disclosed by people familiar with the matter.

Deutsche Bank Taps Partnership with Bitpanda

According to reports from Bloomberg, Deutsche Bank is partnering with Bitpanda to launch the crypto service.

Bitpanda is the largest crypto broker in Europe, with approximately $740 billion in assets. It offers a comprehensive range of digital assets available for trading.

In June 2024, Bitpanda formed a strategic partnership with Deutsche Bank.

The alliance focused on providing real-time payment solutions to Bitpanda customers for incoming and outgoing transactions.

Thus, the recent collaboration for the crypto custody service has expanded their existing relationship. Bitpanda will assist Deutsche Bank through its technology unit.

Taurus, a Swiss-based fintech, will also assist the German bank in launching its crypto custody service.

As a global technology firm, Taurus provides over 25 institutional clients with a platform to manage their digital assets.

Deutsche Bank’s crypto custody plan aligns with its broader push in the crypto sector. In October 2024, Digital asset market maker Keyrock partnered with Deutsche Bank.

Both parties leveraged the collaboration to boost foreign exchange (FX) and payment operations.

Deutsche Bank also recently disclosed plans to commence stablecoin issuance. Based on preliminary information, the bank intends to use Ripple technology to deploy and manage its stablecoins.

Other top banking firms are also pushing for a first mover advantage in the digital currency ecosystem.

From JPMorgan to Morgan Stanley, the push for a sustainable crypto product to match investor demand has triggered new collaborations across the board.

Why Financial Institutions are Embracing Crypto?

Deutsche Bank’s increasingly active involvement in crypto trading is part of a growing trend for institutions.

Across the globe, financial institutions have started offering crypto services, including custody, trading, and wealth management.

Banks are integrating cryptocurrency services or developing native blockchain solutions to meet the growing demand from users.

Recently, Russia’s Sberbank announced it will begin offering financial services connected to Bitcoin (BTC).

Additionally, the bank announced plans to launch a Bitcoin futures product through its SberInvestments platform.

In Japan, the Central Bank confirmed the adoption of Ripple’s linked XRP coin. The Central Bank of Japan noted that banks in the country will adopt XRP for payment transactions by 2025.

The surge in crypto adoption among financial institutions in Europe is very glaring. Bitpanda’s March survey showed 19% of banks provide services, while 40% of EU business investors own crypto.

Is MiCA a Hurdle for European Banks?

Financial institutions feel more confident to join the crypto space due to the positive shift in regulatory clarity across regions.

In Europe, lawmakers introduced the Markets in Crypto-Assets (MiCA) regulation to regulate digital assets, their issuers, and service providers.

The MiCA regulatory framework became fully enacted in December 2024. It aims to create a transparent and secure environment for cryptocurrencies and related services.

However, Circle CEO Jeremy Allaire expressed concerns about the impact of MiCA on the crypto industry at the time.

This is because MiCA requires stablecoin issuers to hold 30% of their reserves in cash across multiple EU bank accounts.

The requirement increases to 60% for e-money tokens. According to Allaire, this introduces considerable bank risk.

Circle’s EU strategy and policy lead, Patrick Hansen, supported Allaire’s concerns. However, he mentioned that the reserve requirements in MiCA are set for review next year.

He expects these provisions to be addressed during the review.

Some industry experts speculate about the introduction of a follow-up MiCA II regulation. They expect the incoming regulation to address specific aspects of Decentralized Finance (DeFi).