Commerzbank Breaks Ground: Applies for Cryptocurrency License in Germany

In a groundbreaking move, Commerzbank, one of Germany's largest banking institutions, has officially confirmed its application for a local crypto license, marking a significant foray into the cryptocurrency realm by a major bank in the country.

A spokesperson from Commerzbank verified to local media outlet Börsen-Zeitung on April 14 that the bank had "applied for the crypto custody license in the first quarter of 2022." This license, if approved, would empower the bank to provide exchange services and offer custody and protection for crypto-assets.

Serving a vast customer base of over 18 million individuals and more than 70,000 institutional clients, Commerzbank aims its cryptocurrency services primarily at its institutional clientele.

Since January 1, 2020, any entity wishing to offer cryptocurrency services in Germany is required to obtain approval from the Federal Financial Supervisory Authority (BaFin). Presently, only four companies have secured this approval, but BaFin reveals it has over 25 pending applications from firms seeking to operate crypto custody businesses.

Coinbase Germany achieved the pioneering approval from the regulator in June 2021, and the most recent approval went to Berlin-based financial technology firm Upvest in March.

Commerzbank has a history of involvement in blockchain projects, dating back to 2018, when it conducted some of the initial transactions on a distributed ledger technology (DLT) security lending platform in collaboration with other major banks.

More recently, in August 2021, the bank entered into a partnership focused on developing blockchain-based digital marketplaces for established asset classes such as art and real estate.

Germany has been actively fostering reforms, regulations, and the wider adoption of blockchain technology and cryptocurrencies. This move by Commerzbank aligns with the growing interest and acceptance of cryptocurrencies in the country. According to a March report by Kucoin, 44% of Germans expressed motivation to invest in cryptocurrencies, with 37% of German crypto investors engaging in trading for over a year.