Deutsche Bank Taps Crypto Market with Launch of Institutional Custody Service
Germany's largest bank, Deutsche Bank, is set to launch its bitcoin custody service by the end of this year. The announcement comes as Bitcoin traded at $75,547 on Wednesday afternoon.
Gerald Podobnik, co-head of Deutsche Bank’s corporate bank, stated that digital assets are not a replacement for traditional financial systems but an important complement to them.
Deutsche Bank applied for a digital-asset custody licence in June 2023 and is now one of the banks that holds a globally systemically important designation. The bank plans to use selected external technology and infrastructure providers for defined technical components, with its technology partner remaining undisclosed at this time.
The service will initially cover a range of digital assets including Bitcoin, Ether, USDC, EURC, and EURAU, as well as tokenized financial instruments that are included in the bank's roadmap. Deutsche Bank will manage the wallets and private keys itself, with the keys sitting behind hardware-based protection, multi-person approvals, and separate warm and cold storage.
The announcement has been met with caution by some experts, who note that digital assets involve material risks including price volatility, fraud, cyber incidents, and failures of market participants. Crypto-assets are not covered by a deposit-guarantee scheme comparable to the protection applicable to eligible bank deposits.