Deutsche Bank to provide crypto custody services

The crypto market is worth nearly $1.1 trillion, down from a peak of just above $3 trillion in November 2021, as per CoinGecko data

Deutsche Bank has partnered with Swiss crypto company Taurus to provide custody services for institutional clients’ crypto currencies and tokenised assets, Taurus said in a statement on Thursday.

The collaboration means Deutsche Bank will, for the first time, be able to hold a limited number of crypto currencies for its clients, as well as tokenised versions of traditional financial (TradFi) assets, a Deutsche Bank spokesperson said.

Crypto trading is not in the bank’s “immediate plans”, the spokesperson added. Deutsche Bank stated it intended to offer crypto trading in a World Economic Forum (WEF) paper back in 2020.

Crypto markets have struggled to recoup from last year’s series of failures at leading crypto companies, which left investors with big losses and led lawmakers around the world to call for more regulation. Still, several top financial firms are talking about the possibility of blockchain – the technology behind crypto currencies – to be used in the trading and settlement of TradFi assets.

Several banks, including Standard Chartered, BNY Mellon and Societe Generale, offer crypto custody services.

As the digital asset space is expected to encompass trillions of dollars of assets, it is bound to be seen as one of the preferences for investors and corporations alike, said Paul Maley, Deutsche Bank’s global head of securities services.

The crypto market is worth nearly $1.1 trillion, down from a peak of just above $3 trillion in November 2021, as per CoinGecko data.

Our focus is not just on crypto currencies, but supporting our clients in the overall digital assets ecosystem, he said.

U.S. regulators have cautioned banks to be on guard for liquidity risks from crypto-related clients.

Maley said Deutsche Bank is moving “cautiously and in line with the spirit and the letter of the regulations governing this asset class.”

Our product design, and the nature of custody for clients, will ensure that there isn’t the risk of affecting the bank’s other activities, Maley added.