On the heels of new Anti-Money Laundering laws, more than 40 German banks are seeking permission to offer crypto custody services.
February 11, 2020 | AtoZ Markets – Government officials in Germany confirm that several banks have filed a request to launch a digital asset custody business. BaFin, the nation’s financial regulator, says it has received over 40 applications from parties interested in offering cryptocurrency custody services, reports news outlet Handelsblatt.
Cryptocurrency regulations welcomed by the industry
Germany’s updated Money Laundering Act permits banks and other local financial institutions to provide and manage traditional securities. These include stocks and bonds, along with digital assets, including Bitcoin, Ethereum, and Ripple.
Digital currencies have become increasingly popular during the past few years. As the market capitalization of crypto assets continues to grow, climbing to $288.3 billion, BaFin is addressing the issue of anonymity and the exploitation of these emerging assets by criminals, money launderers and international terrorists. The regulator is warning firms that a valid license is needed to offer custody services.
German authorities formulated the new regulations after the European Union introduced its fifth anti-money laundering directive (AMLD5). This law requires crypto-related companies to ensure that their operations comply with updated know-your-customer and AML processes.
FDP -Bundestagsabgeordnete Frank Schäffler tells Handelsblatt,
“The market is growing faster than the Federal Ministry of Finance has predicted. That is both a blessing and a curse. The high demand for crypto custody licenses shows that companies are increasingly adopting blockchain technology, and this is also the result of the new legislation.”
BaFin has set a November 2020 deadline for such firms to establish compliance procedures for storing crypto assets or conducting any other kind of business that deals with digital assets.
SolarisBank first to offer crypto custody services
One of the first financial institutions to offer cryptocurrency services is Solarisbank in Berlin. Besides, SolarisBank had earlier announced the launch of its subsidiary – Solaris Digital Assets GmbH which aims to provide custody services. Following the latest development, the Head of crypto banking at the institute, Michael Offermann stated,
“We have been dealing intensively with crypto custody for a year and a half. The new regulation in the new Money Laundering Act is a good time to start practically. After all, we are not a research institute, but a commercial bank”
Will German Banks offering crypto custody add to the country’s budding crypto ecosystem? Let us know in the comments section below.