German banking giant applies for cryptocurrency license

One of Germany's largest banking institutions has confirmed that it applied for a local cryptocurrency license earlier this year, marking the first time a major German bank has taken a step towards cryptocurrencies.

A spokesperson for Commerzbank confirmed to local media outlet Börsen-Zeitung on April 14 that it “applied for a cryptocurrency custody license in the first quarter of 2022.” If approved, it will be authorized to provide exchange services as well as custody and protection of crypto assets.

Commerzbank, which serves more than 18 million customers and more than 70,000 institutional clients, will reportedly target its institutional client base with cryptocurrency offerings.

As of January 1, 2020, any business wishing to offer cryptocurrency services in Germany must first obtain approval from the Federal Financial Supervisory Authority (BaFin).

So far, only four companies have been approved, but BaFin says it has more than 25 applications from companies looking to operate crypto custody businesses.

Coinbase Germany was the first to receive regulatory approval in June 2021, with Berlin-based financial technology firm Upvest receiving a license as recently as March.

Commerzbank was involved in the blockchain project as early as 2018, and the following year carried out the first transactions with other major banks on the distributed ledger technology (DLT) securities lending platform.

Most recently, in August 2021, Commerzbank partnered to develop blockchain-based digital marketplaces for existing asset classes such as art and real estate.

Germany introduces a series of reforms, regulations and further adoption of blockchain technology and cryptocurrencies in 2021.

German investors are also keen to adopt cryptocurrencies. A March report by KuCoin revealed that 44 percent of Germans “have a motivation to invest in cryptocurrencies” and that “37 percent of German crypto investors have been trading cryptocurrencies for more than a year.”