Commerzbank, one of the largest banking institutions in Germany, applied for a local crypto license earlier this year. This is the first time in the Western European country for a major bank to make a move toward cryptocurrencies.
A spokesperson for Commerzbank revealed that it applied for the crypto custody license in the first quarter of 2022. With the approval of the license, the bank would offer exchange services along with custody and protection of crypto-assets.
Businesses wanting to offer cryptocurrency services in Germany must seek approval from the Federal Financial Supervisory Authority (BaFin). This came into effect on 1, 2020. Only four companies currently have approval. BaFin highlighted that it has over 25 applications from firms wanting to operate crypto custody businesses. The regulator first approved Coinbase Germany in June 2021, and in March 2022 to Upvest, a Berlin-based financial technology firm.
Commerzbank has been involved in blockchain projects since 2018. The financial institute carried out some of the first transactions on a distributed ledger technology (DLT) security lending platform with other banks. In August 2021, Commerzbank collaborated to develop blockchain-based digital marketplaces for existing asset classes, like art and real estate. The German government also introduced a raft of reforms, and regulations in 2021 prompting further adoption of blockchain technology and cryptocurrencies.