Germany’s DZ Bank Launches Blockchain-based Digital Asset Platform

DZ Bank, Germany’s third-largest bank, has recently launched a blockchain-based digital asset custody platform.

The platform is designed to cater to institutional clients, offering crypto securities and related products, such as crypto bonds from Siemens. The collaboration with Siemens took place six months ago.

Capital markets’ interest in cryptocurrencies is growing significantly, with the potential approval of spot Bitcoin ETFs. Additionally, 700,000 new BTC addresses were created in a single day, indicating the increasing adoption of cryptocurrencies.

DZ Bank has been working consistently on blockchain technology for a year, and since 2022, it has started building a digital custody platform specifically for institutional customers.

Head of Securities Services & Digital Custody at DZ BANK Holger Meffert said: “We assume that within the next ten years, a significant proportion of capital market business will be processed via distributed ledger technology (DLT)-based infrastructures. In the medium term, we see DLT as a complementary technology to the established infrastructures in the existing capital market processes.”

DZ Bank applied for a crypto custody license from the Federal Financial Supervisory Authority (BaFin) in June.

This will enable the bank to offer its customers an opportunity to invest in cryptocurrencies such as Bitcoin in the future.

The bank is also developing an option for private customers to invest directly in cryptocurrencies. The bank has previously gained experience in handling crypto fund shares as a processor and custodian for external transactions from Bankhaus Metzler. Both cases come under the scope of the Electronic Securities Act (eWpG), which allows for custody with existing licenses.

DZ Bank actively took part in the European Central Bank’s (ECB) exploration phase, where the bank’s existing infrastructure was used to test the settlement of large-volume capital market transactions in central bank money.