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Deutsche Bank has formed a partnership with Swiss crypto company Taurus to provide custody services for institutional clients’ cryptocurrencies and tokenized assets, according to a statement by Taurus on Thursday.
This partnership marks Deutsche Bank’s entry into the cryptocurrency custody space, allowing the bank to securely hold a select number of cryptocurrencies for its clients, along with tokenized versions of traditional financial assets, as confirmed by a Deutsche Bank spokesperson.
However, it’s important to note that the bank currently has no immediate plans to engage in cryptocurrency trading, despite expressing its intent to offer crypto trading in a World Economic Forum paper back in 2020.
The cryptocurrency markets have faced significant challenges in recovering from last year’s series of collapses at prominent crypto firms. These incidents resulted in substantial losses for investors and triggered calls for increased regulation from lawmakers worldwide. Nevertheless, various mainstream financial institutions are exploring the potential of blockchain technology, the foundation of cryptocurrencies, for the trading and settlement of traditional financial assets.
Several banks, including Standard Chartered, BNY Mellon, and Societe Generale, already provide cryptocurrency custody services.
Paul Maley, Deutsche Bank’s Global Head of Securities Services, commented, “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.”
The cryptocurrency market is currently valued at around $1.1 trillion, down from its peak of just over $3 trillion in November 2021, as reported by CoinGecko data.
Maley emphasized that Deutsche Bank’s focus extends beyond cryptocurrencies, as they aim to support clients within the broader digital assets ecosystem.
U.S. regulators have cautioned banks to remain vigilant regarding liquidity risks associated with clients involved in cryptocurrency-related activities.
Maley reassured that Deutsche Bank is proceeding cautiously and adhering to the regulations governing this asset class, both in spirit and letter. He stated, “Our product design and the nature of custody for clients will ensure that there is no risk of contaminating the bank’s other activities.”
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