Deutsche Bank, which has nearly one and a half trillion dollars in assets, has set up custodial services for its clients’ cryptos.
The 153-year-old banking giant joins banks such as Standard Chartered, BNY Mellon and Societe Generale, all of which offer crypto custody solutions.
Deutsche Bank’s new take on crypto
Deutsche Bank has released a statement about this collaboration with the Swiss crypto company Taurus. This partnership aims to provide crypto custody services and address tokenized assets.
“As the digital asset space is expected to span trillions of dollars in assets, this will undoubtedly be seen as one of the priorities for investors and companies alike. Our focus is not just on cryptocurrencies, but on supporting our customers in the overall digital asset ecosystem. Our product design and the nature of the custody for customers will ensure that there is no risk of contamination of the bank’s other activities,” said Paul Maley of Deutsche Bank.
It is worth noting that Deutsche Bank had participated in Taurus’ $65 million Series B fundraising round in February.
This week also brought news of London’s HSBC has partnered with crypto custody technology company Fireblockswhich has previous partnerships with banking leaders such as BNY Mellon and BNP Paribas.
Read more: Deutsche Bank becomes the latest banking giant to attempt a crypto takeover
While a spokesperson clarified that Deutsche Bank is not immediately venturing into crypto trading, this contradicts a statement from a 2020 World Economic Forum paper. Interestingly, the bank had applied for a crypto custody license in Germany in June.
While the bank has historically been skeptical of crypto, it has shown consistent interest in blockchain and has championed its benefits in several articles since 2017.
“I just wouldn’t recommend it [Bitcoin] for the everyday investor,” Ulrich Stephan, chief strategist at Deutsche Bank, said.
The shifts in banks’ opinions on crypto are notable, albeit gradual. In February 2019, Bank of America and JPMorgan Chase & Co. their concerns about crypto. The latter’s CEO, Jamie Dimon, had even labeled Bitcoin as ‘fraud’.
Persistent Skepticism towards Crypto
Despite these progressive steps, crypto is still seen as a global economic threat in the eyes of many banks. The collapse of Terraform Labs from TerraUSD (UST) last year wiped billions off its market value, exacerbated by the implosion of FTX in November. The ensuing ‘crypto winter’ has since cast a shadow of caution on traditional finance.
A disturbing incident in March highlighted a mid-scale banking crisis in the US, with bank stocks plummeting. Three banks involved had some degree of crypto association, further tarnishing the image of crypto. Silvergate Capital, the most crypto-positive bank of the trio, was a substantial lender within the sector.
Read more: XRP Is a Major Threat to Big Banks, Says Crypto Exec
Today, major financial institutions continue to weigh the risks of cryptocurrencies. Just a week ago, the International Monetary Fund (IMF) unveiled a strategy to limit the damaging effects of crypto on the global economy. This serves as a stark reminder of the long journey that crypto’s reputation still has ahead.
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