Landesbank Baden-Württemberg to Offer Cryptocurrency Custody Solutions

Germany's largest federal bank, the Landesbank Baden-Württemberg, announces plans to commence cryptocurrency custody solutions in the latter half of 2024. Collaborating with the Austria-based Bitpanda cryptocurrency exchange, the bank aims to provide these services primarily to institutional clients.

German Bank Enters Crypto Custody Realm

In response to growing corporate interest in digital asset custody, Jürgen Harengel, managing director of corporate banking at Landesbank Baden-Württemberg, confirms escalating demand from corporate customers for digital assets.

Bitpanda Partnership for Custody Services

The Landesbank Baden-Württemberg opts to utilize Bitpanda's institutional custody solution for its crypto offering. Bitpanda Custody, a platform with decentralized finance capabilities, is registered with the United Kingdom's Financial Conduct Authority (FCA).

Regulatory Preparedness in Germany

In preparation for the Markets in Crypto-Assets (MiCA) regulatory framework, German banks are actively exploring crypto services. Deutsche Bank has been developing digital asset custody services since September 2023, leveraging Swiss crypto startup Taurus for custody and tokenization services. Similarly, DZ Bank, Germany's second-largest bank, plans a crypto trading pilot in 2024, unveiling its digital asset custody platform in November 2023.

MiCA's Impact on Regulation

As the MiCA regulatory framework is set to take full effect in December 2024, European banks are gearing up for comprehensive legal provisions for the crypto industry. Under MiCA, crypto exchanges will become fully regulated entities, marking a significant shift in the regulatory landscape. Vyara Savova, senior policy lead at the European Crypto Initiative, underscores the transformative nature of MiCA, heralding 2024 as the year of regulatory overhaul.

Consultation on MiCA Implementation

While the MiCA bill is still under finalization, ongoing consultations, such as those on reverse solicitation guidelines, play a pivotal role in shaping its implementation. The outcomes of these consultations will determine crucial aspects of MiCA's execution, including how exchanges from non-EU countries can provide services to EU citizens and how these services should be marketed in Europe.