As the cryptocurrency industry continues to expand around the globe and across a wide range of businesses, financial institutions are seeing a surge in demand from customers for services and investments in the crypto license that are both secure and compliant with regulatory requirements.
One institution that has taken the initial steps toward delivering digital asset-related services is the German-based Commerzbank, which has announced its application for a crypto license custody business licence from the country's Federal Financial Supervisory Authority (BaFin). According to a spokesman from Commerzbank, the bank "applied for the crypto banking license in the first quarter of 2022," according to a story published by Börsen-Zeitung on April 14.
Indeed, the government gives the BaFin licence to financial institutions that want to hold digital currencies for their customers and sell them on the open market. It has become essential to get this licence from January 1, 2020, to do business with crypto banking licenses such as Bitcoin (BTC) and Ethereum (ETH) (ETH).
What is the purpose of the BaFin licence?
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As a result, Binance has slammed suggestions that it has shared user data with Russian authorities as "categorically incorrect."
The decision to provide regulated financial services without the appropriate licence may result in a criminal penalty of up to five years in jail for those found guilty of the crime. Although the legislation specifies substantial transitional arrangements, it also makes exceptions for entities that have previously been performing relevant transactions before the directive's implementation.
Commerzbank will offer a cryptocurrency license custody service in Germany, which serves approximately 28,000 corporate customer groups and close to 11 million private and entrepreneurial individuals. According to the bank, the anticipated cryptocurrency license custody service will mainly target institutional clients.
By applying for a licence to operate as a German bank crypto license custodian, it has joined a lengthy list of organisations attempting to secure such a licence. According to the financial regulator, 25 applications for the licence have been submitted so far, with four of them being granted. Coinbase was the first business to get a german bank crypto license custody when it did so in January 2021. Commerzbank has become the first bank to apply for it.
Banks are broadening their scopes as demand increases.
According to other reports, banks throughout the globe are becoming more interested in extending their services to include cryptocurrency. According to Finbold, one of these companies is the financial behemoth Goldman Sachs, which expects to provide Commerzbank crypto license services for its high-net-worth clientele in the second quarter of 2022.
Furthermore, Blythe Masters of Credit Suisse, a board member and fintech specialist, has claimed that Bitcoin is neither a danger to fiat money nor the financial industry. On the other side, some crypto specialists feel that Commerzbank crypto license would make certain financial services' irrelevant,' according to their beliefs.