Frankfurt’s financial district, also known as Germany’s Wall Street. Image by Jorge Franganillo via flickr.com. License: Creative Commons
First slowly, then very quickly: After being cautious for a long time, the German financial industry is now becoming more and more involved in crypto. An overview of some intermediaries struggling to avoid becoming obsolete.
In just ten days there were three reports that one would hardly have believed a few years ago, but today one almost shrugs off the news.
Details are pretty sparse in all cases. We will therefore briefly reproduce the three reports and then speculate a little about how they should be understood.
DZ Bank launches “digital custody platform”
DZ Bank is the second largest bank in Germany in terms of total assets, but very few people know it because it does not work in the end customer business. It is the central institution of the cooperative banks, such as the Volks- and Raiffeisenbanken, which it supports with liquidity equalization and refinancing funds.
The DZ is now launching its own “digital custody platform” that allows “digital financial instruments” to be stored and processed. It will “initially store crypto securities” on the platform, including a “crypto bond” from Siemens and “crypto fund shares” from Bankhaus Metzler.
In addition, DZ Bank has applied for a crypto custody license to “enable institutional customers to invest in cryptocurrencies such as Bitcoin.” At the same time, the bank is already “working on an offer that will allow private customers to invest directly in cryptocurrencies.”
DZ Bank does not disclose technical details. But the bank is obviously well positioned to supply the network of VR banks with both crypto securities and cryptocurrencies.
Commerzbank receives license as crypto custodian
While DZ Bank has only applied for a license as a crypto custodian from BaFin, Commerzbank is the first major bank to have already received it.
This license, the bank explains in a short statement, will enable it to “build a wide range of services in the area of digital assets, specifically crypto assets.”
In the first step, Commerbank will “provide its institutional customers with a secure, regulatory-compliant and reliable platform for the safekeeping of crypto assets based on blockchain technology.”
Unfortunately, Commerzbank doesn’t reveal anything more.
Deutsche Börse includes digital assets in strategy paper
The third report is even more nebulous: Deutsche Börse published a strategy report “Horizon 2026” on November 7th.
In this report it presents its plans and forecasts up to 2026. This also includes “expanding the leading position in the area of digital platforms for existing and new asset classes”. It assumes that new growth potential will arise through “the digitization of existing or new asset classes, including the corresponding trading and settlement platforms”.
In order to tap this potential, Deutsche Börse would like to build “a trading platform for digital asset classes” in order “to significantly expand the range of both investable and tradable instruments.”
Anyone who acts too late risks becoming redundant
So how are you supposed to understand all of this? The statement from DZ Bank is perhaps the clearest. It will store and process crypto securities such as digitized bonds or fund shares, which means that this new class of securities will probably make it into the entire Volks- und Raiffeisenbanken network relatively quickly. Crypto securities most likely run as tokens on an open blockchain – the Siemens bond on Polygon – but possibly also on a private one.
At the same time, DZ Bank also plans to store cryptocurrencies for the banks belonging to its network and possibly also for private customers. Instead of the current rather insular nature of Volksbank Bayern Mitte and Volksbank Mittweida, a wide range of crypto services will likely be available at every single Volksbank in the future, from Berlin to Beimerstetten-Eiselau.
Commerzbank has been dealing with various blockchain topics for several years, even though it has traditionally been critical of Bitcoin and other cryptocurrencies. The subsidiary Comdirect, on the other hand, has been offering its customers cryptocurrencies in their savings plan for several years, for which it uses the ETP from 21Shares. With the custody platform, it wants to allow institutional customers to store crypto assets. It is unclear whether these are cryptocurrencies such as Bitcoin or tokenized securities.
At least one can assume that Deutsche Börse is not talking about cryptocurrencies, but most likely about electronic and crypto securities. These became legally possible through the eWPG and are slowly arriving on the market, as can be seen in the example of DZ Bank. It should go without saying that Deutsche Börse is planning this into its strategy until 2026.
In fact, the issue is anything but straightforward for the stock market. Because crypto securities enable other actors to bypass intermediaries. Deutsche Börse will therefore make an effort to act early so as not to become one of the middlemen that no one needs in the end.
And perhaps that’s the essence of what you can glean from the dry press releases that skimp on details: the race to avoid becoming the overlooked intermediary has begun.
Source: https://bitcoinblog.de/2023/11/16/dz-bank-commerzbank-deutsche-boerse-die-deutsche-finanzwirtschaft-steigt-in-krypto-ein/
