Commerzbank AG has been granted a cryptocurrency custody license, signaling a growing acceptance of the asset class among European banks.
The recently obtained license enables the bank to develop an extensive array of digital asset services, focusing on cryptos, marking it as the “first German full-service bank” to secure such approval, according to a statement released on Wednesday, November 15.
This move comes after the submission made in April this year. It reflects a cautious entry by European banks into the cryptocurrency market, a departure from their initial reluctance due to associated risks and concerns about potential money laundering.
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The shift is occurring amid a rebound in Bitcoin’s (BTC) price following a downturn last year triggered by the collapse of several high-profile businesses and fraud scandals within the industry.
Similar ventures by other European banks
Like Commerzbank, other banks are responding to client demand and venturing into crypto. Societe Generale SA’s blockchain unit received the inaugural license under France’s new cryptocurrency regulations in July. Additionally, German cooperative lender DZ Bank AG recently announced the initiation of a platform for the custody of digital assets.
Unlike some European countries, Germany mandates that banks secure a formal expansion of their licenses to provide crypto services, including custody. This requirement offers European banking regulators transparency into the country’s crypto market.
Despite these developments, the European Central Bank (ECB) remains wary of potential loopholes allowing lenders to evade scrutiny of their crypto businesses.
The growing acceptance of digital assets and cryptocurrency-based operations is not limited to the European banking industry alone. In the recent past, an increasing number of banks worldwide have embraced this trend, with one noteworthy addition being HSBC Holdings, which has incorporated blockchain technology into its operations.
