German third-largest bank DZ Bank, with assets under management exceeding 300 billion euros, recently announced the launch of a digital asset custody platform for institutional clients. The platform will initially provide custody services for encrypted securities, and DZ Bank is also developing products that will allow private clients to directly invest in cryptocurrencies.
DZ Bank has hired over ten IT, operations, and compliance professionals to support the new custody solution. The bank has been researching blockchain technology for years and plans to construct a digital custody platform for institutional clients starting in 2022. The platform will initially hold encrypted securities such as Siemens Group’s encrypted bonds, which were subscribed to six months ago by Union Investment and DZ Bank and have now been transferred to their own custody.
Additionally, DZ Bank previously acted as a settlement and custodian agent in the first external transaction of cryptocurrency fund shares conducted by Bankhaus Metzler. Since both cases fall within the scope of electronic securities law, custody can be conducted using existing licenses.
To enable institutional clients to invest in cryptocurrencies like Bitcoin in the future, DZ Bank applied for a cryptocurrency asset custody license with the German Federal Financial Supervisory Authority (BaFin) in June this year. At the same time, DZ Bank is also developing products that will allow private clients to directly invest in cryptocurrencies.
With its existing infrastructure, DZ Bank will actively participate in the exploration phase of the European Central Bank’s (ECB) settlement testing using Central Bank Digital Currencies (CBDC) for large-scale capital market transactions.
As a partner of cryptocurrency custody provider Metaco, DZ Bank will use Metaco’s custody technology platform Harmonize to provide digital asset custody services. DZ Bank selected Metaco Harmonize in February this year as the infrastructure platform to realize its vision. Ripple Labs recently acquired Metaco for $250 million in May to custody, issue, and settle any type of tokenized asset.
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DZ Bank
Metaco
Germany
digital asset custody