Each nation in the European Union is working towards making their market and the govt friendly towards crypto and the blockchain. Previously I covered how BIS is approving on variety of the blockchain compliance and regulations. Even the data specific rules are being considered by the EU nations.
Recently German made few progress on the front of the blockchain. They managed to give out the licenses to the domestic banks related to the crypto stablecoins and the exchanges. Now they are moving few steps ahead and giving license to the crypto custody too.
As of now the license would only cover the Bitcoin and Ether. But in near future this would change and more altcoins and the digital assets would be coming under the crypto custody regulations.
Let's take a look at the whole scenario of how the Commerzbank got approval for the crypto custody license.
Crypto Regulations in Germany
Considering EU does most of the union specific rules. I had this question that if german has its own nation specific rules that are applicable to the crypto and the exchanges and turns out that is a true thing. You may find that crypto is legal in germany. And people can safely trade the crypto.
There are two standard bodies namely BaFin and KWG which are governing the crypto exchange rules and the regulations. And it is expected that they may be impose more rules as they experience the issues in the crypto trading. As of now the scenario is it is crypto safe nation.
They don't treat the crypto as a legal tender but think of them as a stock or mutual fund which has it's value in a collective basis with linked to the stablecoin or fiat that is native to the nation. Which is a positive move from the germany.
Digital Assets, Trading and Custody of the Crypto
As the crypto becomes legal in the germany, next question comes out on whether the digital assets are legal or not in the nation. Yes they are legal. And you can even trade futures, intraday and also hold them in the exchange. However in order to hold them you would have to get the license. And many exchanges already have the same.
Like say Binance which does exist in Germany and people who use it can do so like any other app of bank or so. But they are just the custodian and the exchange and not the bank. So for working with the digital assets you need a custody license too. This is where Commerzbank comes in.
First Bank to Approval in Germany for Crypto Custody
Commerzbank is the 4th largest bank in the Germany. And they seem to be pretty much winning the race and got the approval for the crypto custody license. Which includes most of the digital assets but they are kind of focused on the crypto assets custody for this particular license. Which would be good for their development with clients in future.
As of now this is focused on the enterprise, corporate and the high value clients who are in need of the top custody coins like bitcoin and ethereum. So in near future you may see that commerzbank would be working towards expanding it's offering to other crypto services.
Germany is one of the strong nation in EU in context of blockchain and technology in crypto space. They taking the crypto custody licenses for the digital assets and the variety of the future services around blockchain goes to show there is a strong future for crypto ahead. Banks also taking the bitcoin and ethereum seriously shows a better future for their citizen investors.