The amalgamation of traditional and decentralized finance is evident from the fact that several centralized institutions are making accommodations for digital currencies. Commerzbank, a German banking giant, has also joined this adoption wave by applying for a crypto license.
According to a spokesperson for Commerzbank. The bank has already applied for the license with BaFin earlier in 2022, marking the first large-scale step taken by a centralized institution in Germany. The spokesperson told Börsen-Zeitung on April 14 that it “applied for the crypto custody license in the first quarter of 2022.”
If the crypto license gets approved, the bank will become authorized to offer crypto exchange services along with protection and custody of crypto-assets. Commerzbank currently serves more than 18 million customers and has more than 70,000 institutional clients whom it will market the crypto services to.
Crypto and Germany
Commerzbank can provide a pathway for this massive clientele into the digital currency world and serves as the medium for large scale crypto adoption. This approval needs to come from the Federal Financial Supervisory Authority (BaFin) as per the regulations passed on January 1, 2020. According to this regulation, any business wanting to offer crypto services in Germany requires approval from BaFin.
Currently, BaFin has only approved four companies in Germany and has more than 25 applications pending from firms that wish to operate crypto custody businesses. While Coinbase Germany became the first company to be approved by BaFin in 2021, Upvest, a Berlin-based fintech company, was the most recent company to get its license last month.
However, Commerzbank has a good shot at becoming the next licensed company as it has been active in the crypto space since 2018. The bank carried out a few of the first transactions on the blockchain security lending platform along with other major banks. Moreover, last year in August, Commerzbank also entered into a partnership with projects to develop the NFT marketplaces for real estate and art.
In addition, German investors have been keen on adopting digital currencies, which will increase the chances of more licensed companies in Germany.