LONDON (Reuters) – Deutsche Bank has partnered with Swiss crypto firm Taurus to offer custody services for institutional clients’ cryptocurrencies and tokenised assets, according to a statement by Taurus on Thursday.
The collaboration will enable Deutsche Bank to hold a limited number of cryptocurrencies and tokenised versions of traditional financial assets on behalf of its clients, marking the first time the bank has ventured into the crypto space, a Deutsche Bank spokesperson confirmed.
It is worth noting that the bank does not currently have plans to engage in crypto trading, although it previously expressed its intention to do so in a World Economic Forum paper in 2020.
The crypto market has been struggling to recover from a series of collapses at major crypto firms in the past year, leading to significant losses for investors and increased calls for regulatory oversight from global lawmakers. Despite these challenges, several mainstream financial institutions are exploring the potential of blockchain technology, which underlies cryptocurrencies, to facilitate the trading and settlement of traditional financial assets.
Other banks including Standard Chartered, BNY Mellon, and Societe Generale already offer crypto custody services.
Paul Maley, Deutsche Bank’s global head of securities services, stated, “As the digital asset space is expected to encompass trillions of dollars of assets, it’s bound to be seen as one of the priorities for investors and corporations alike.”
Currently valued at around $1.1 trillion, the crypto market has experienced a decline from its peak above $3 trillion in November 2021, according to data from CoinGecko.
Maley emphasized that Deutsche Bank’s focus extends beyond cryptocurrencies to providing support for its clients within the larger digital asset ecosystem.
In the United States, regulators have cautioned banks about potential liquidity risks associated with crypto-related clients.
Maley assured that Deutsche Bank is proceeding with caution and adhering to regulations governing this asset class, stating, “Our product design and custodial practices will ensure that there is no risk of contaminating the bank’s other activities.”
Elizabeth Howcroft reporting; Christina Fincher editing.
Credit: The Star : Tech Feed
