Early in 2023, MicroStrategy’s Michael Saylor predicted that all big banks will one day custody Bitcoin (BTC). Indeed, despite the setbacks suffered by the cryptocurrency industry throughout the year, major banks have been reaching important milestones with Germany in many cases leading the way.
DZ Bank – Germany’s third largest – recently announced that it had launched its very own blockchain technology-based ‘digital financial instruments’ custody platform designed to cater to institutional customers.
The bank has a relatively long history with cryptocurrencies and has already been involved in Bankhaus Metzler’s first external transfer of crypto fund shares as a custodian and processor.
The increased interest of German banks in the cryptocurrency market is further exemplified by the fact that, in addition to DZ Bank, the $1.4 trillion banking giant – Deutsche Bank – also filed for the crypto custody license with BaFin in June 2023.
DZ Bank believes DLT will become industry standard within a decade
Dr. Holger Meffert, the head of securities services and digital custody at DZ Bank, also expressed his conviction that the majority of capital market activity will be conducted using distributed ledger technology (DLT) within the next decade. DTL is often implemented using blockchains:
We assume that within the next ten years a significant proportion of capital market business will be processed via distributed ledger technology (DLT)-based infrastructures. In the medium term, we see DLT as a complementary technology to the established infrastructures in the existing capital market processes.
In its press release, DZ Bank also highlighted that its already-existing infrastructure is enabling it to be an active participant in the European Central Bank’s (ECB) exploration phase for the digital euro.
DZ Bank working to bring crypto custody to private customers
In its press release, DZ Bank also revealed it is actively working toward bringing cryptocurrency custody and trading services to its private customers. It announced it had hired ‘more than a dozen employees’ to fill the roles in compliance, IT, and operations to this end – as well as for the already-launched institutional custody platform.
Already in March 2023, Finbold reported that DZ Bank is actively working to bring a Bitcoin option to its customers before the end of this year. The news accompanied the announcement of the launch of Deutsche WertpapierService Bank AG’s (dwpbank) wpNex platform.
The platform’s introduction enabled more than 1,200 affiliated banks to offer Bitcoin trading and investing to their retail customers. At the time, the launch was lauded as the key step in Germany’s effort to become a major cryptocurrency hub.