Germany’s largest state bank will offer cryptocurrency custody

German bank Landesbank Baden-Württemberg (LBBW), the country’s largest, said it plans to offer cryptocurrency custody services. According to the bank, they intend to use the Austrian platform Bitpanda, which carries out exchange and cryptocurrency operations, in this initiative.

Germany’s largest state bank, LBBW intends to offer the option of cryptocurrency custody to customers. LBBW’s focus will be institutional investors, whose demand is “high”, said the institution.

The two companies have entered into a strategic partnership, which will provide LBBW with an “Investment as a Service” infrastructure to “store and acquire cryptocurrencies”. Initially, the service will allow the custody of Bitcoin (BTC) and Ether (ETH).

“By offering crypto asset custody, we are positioning ourselves with clear added value for our corporate clients – while ensuring the highest security standards,” said Stefanie Münz, member of the LBBW board of directors responsible for finance, strategy and operations . “Bitpanda provides the necessary technical and regulatory infrastructure to offer our customers innovative and, above all, secure solutions in the area of ​​digital assets.”

Service coming soon

LBBW, in collaboration with Bitpanda, will first offer cryptocurrency custody services to corporate clients, i.e. only to large companies. The bank’s intention is to launch the market in the second half of 2024.

“Demand from our corporate clients for digital assets is increasing. We are convinced that crypto assets will establish themselves as a foundation for new business models. With the cooperation, we are creating the technical and regulatory basis at an early stage to better support the individual crypto strategies of our corporate clients,” said Jürgen Harengel, COO of Corporate Bank at LBBW.

This corporate demand for cryptocurrency custody is due to the rules that these investors have. Unlike ordinary citizens, large companies, funds and investors cannot simply buy BTC and store it in a wallet.

Funds, especially ETFs, in addition to banks, need a custodian to store their cryptocurrencies. In the United States, for example, most Bitcoin ETFs use Coinbase as the entity to custody their coins.

The increase in the offerings of these services reflects the growth in institutional adoption of BTC, especially as a store of value. Last year, giants like HSBC bank launched cryptocurrency custody services aimed at corporate clients and large investors.