- Germany’s largest bank has applied for regulatory permission to operate a custody service for cryptocurrencies.
- Deutsche Bank filed its application to BaFin, the country’s financial regulator.
- Bitcoin dominance is on the rise on the back of increasing usage from banking institutions filing for crypto custody solutions or ETFs.
Deutsche Bank AG, Germany’s largest bank, has applied for a license to offer crypto custody services, the bank told FXStreet, in a strategic bet for digital assets despite the current regulatory crackdown in the United States.
The German banking giant, one of the largest financial institutions in Europe with more than $1.3 trillion dollars in assets, has filed its application to the German financial authority, known as BaFin.
Deutsche Bank ventures into crypto custody service
The bank’s move into crypto custody is a part of an effort to increase fee income in the corporate unit and expand offerings to clients, David Lynne, head of the lender’s commercial banking unit, said at a conference on Tuesday, Bloomberg reported.
We’re building out our digital assets and custody business
Lynne said.
While cryptocurrency markets reel from the US Security and Exchange Commission’s (SEC)’s crackdown, regulators in Europe receive applications for crypto service offerings by banking giants.
The push to offer crypto custody is a wider strategy that is likely to capitalize on digital assets to generate higher income. After suffering a bloodbath from US SEC’s regulatory clampdown, the news comes as a breather to crypto traders and projects in the ecosystem.
With banking and financial giants stepping forward to service institutional clients through crypto custodial services and Exchange Traded Funds (ETF), the usage and overall market capitalization of cryptocurrencies is likely to be on the rise.
Moreover, Bitcoin dominance has recently increased, climbing from 44.73% to 46.6% over the past two weeks.
Institutional adoption could fuel crypto recovery
Institutional investors have emerged as key players in the crypto ecosystem since the 2017 Bitcoin bull run. The tumultuous events of 2022, the collapse of Terra’s sister token LUNA and UST and FTX exchange’s bankruptcy drove institutional capital out of altcoins and top cryptocurrencies.
This resulted in a steep decline in the overall crypto market capitalization. As institutions begin to adopt crypto assets, capital inflow is likely to increase and drive a recovery in the ecosystem.
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