Deutsche Bank, boasting nearly one and a half trillion dollars in assets, has initiated custody services for its clients’ cryptos.
The 153-year-old banking behemoth joins the ranks of banks like Standard Chartered, BNY Mellon, and Societe Generale, all of which offer crypto custody solutions.
Deutsche Bank’s New Take on Crypto
Deutsche Bank released a statement regarding its partnership with the Swiss crypto firm Taurus. This partnership aims to provide crypto custody services and address tokenized assets.
“As the digital asset space is expected to encompass trillions of dollars of assets, it is bound to be seen as one of the priorities for investors and corporations alike. Our focus is not just on cryptocurrencies, but supporting our clients in the overall digital assets ecosystem. Our product design, and the nature of custody for clients, will make sure that there is not the risk of contaminating the bank’s other activities,” Deutsche Bank’s Paul Maley said.
It is worth noting that Deutsche Bank had participated in Taurus’s $65 million Series B fundraising round in February.
This week also brought news of London’s HSBC collaborating with the crypto custody tech firm Fireblocks, which boasts previous collaborations with banking leaders like BNY Mellon and BNP Paribas.
Read more: Deutsche Bank Becomes Latest Banking Giant to Attempt Crypto Takeover
Though 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, as recently as June, the bank had sought a crypto custody license in Germany.
While historically skeptical of crypto, the bank has shown consistent interest in blockchain, championing its benefits in several articles since 2017.
“I would simply not recommend [Bitcoin] to the everyday investor,” Ulrich Stephan, chief strategist at Deutsche Bank, said.
Banks’ opinion shifts regarding crypto have been noteworthy, albeit gradual. In February 2019, Bank of America and JPMorgan Chase & Co. expressed apprehensions about crypto. The latter’s CEO, Jamie Dimon, had even gone on record to label Bitcoin as a “fraud.”
Continued Skepticism Toward Crypto
Despite these progressive steps, crypto still registers as a global economic threat in many banks’ eyes. Last year’s Terraform Labs’ TerraUSD (UST) collapse wiped billions off the market value, exacerbated by FTX’s implosion in November. The subsequent “crypto winter” has since cast a shadow of caution over traditional finance.
An unsettling incident in March spotlighted a mid-tier banking crisis in the US, with banking stocks plummeting. Three implicated banks had some degree of crypto association, tarnishing the image of crypto even further. Silvergate Capital, the most crypto-affirmative bank of the trio, had been a substantial lender within the industry.
Read more: XRP Poses Major Threat to Big Banks, Says Crypto Exec
Today, major financial institutions continue weighing the risks associated with crypto. Just a week ago, the International Monetary Fund (IMF) unveiled a strategy to curtail crypto’s detrimental effects on the global economy. This serves as a stark reminder of the long journey crypto’s reputation still has ahead.
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