German bank Donner & Reuschel is set to offer cryptocurrency buying and custodial services to its clients. This signifies a different phase for the bank as it looks to expand its services to the growing crypto industry.
This development was revealed in a press release on March 8, 2021.
According to the report, Donner & Reuschel are set to launch cryptocurrency buying and custodial services. The bank also revealed that the launch was spurred by clients’ demand for digital asset custody.
To facilitate the development of the custodial services, the bank has engaged the services of Distributed Ledger Consulting firm GmbH as a consultant partner. Donner & Reuschel also stated that it intends to explore the tokenization of assets to maximize its chances of grabbing the first-mover advantage from the finance sector’s anticipated shift.
Marcus Vitt, Spokesman of the Bank’s Management Board, believes that it is the right time for the bank to delve into providing crypto services.
“We have been observing the digital assets market for some time now and are convinced of the potential of blockchain technology, also with regard to traditional securities transactions,” he said.
More Banks Considering Crypto Services
The rising popularity of cryptocurrencies like Bitcoin and Ethereum has led to a major shift in financial institutions. Unlike in previous years when banks were reluctant to consider cryptocurrencies due to security fears and regulatory risks.
A significant change has occurred in the banking system in the past 12 months, spurred by the increasing regulations of crypto-assets globally. This has ensured that new crypto products like exchange-traded products (ETPs) can be introduced in a regulated environment for institutions.
However, the cryptocurrency rally that started in late 2020 has led to a spike in digital asset demand. Several financial organizations have begun to add cryptocurrencies to their portfolio, with major firms like Tesla and Square making significant purchases.
Banks have not been left behind, with several established banks incorporating crypto services. Swiss bank, Bordier & Cie SCmA revealed in February that it would be offering cryptocurrency services to its client as per a BTCManager report.
This latest development from Donner & Reuschel is significant since the bank is one of the oldest in Germany, established in 1798. It also holds around $10 billion in assets under management for its clients.