In a significant move, Deutsche Bank has teamed up with the Swiss crypto entity, Taurus, to facilitate custody services for cryptocurrencies and tokenized assets belonging to institutional clientele, as announced in a Taurus statement this Thursday.
This collaboration marks Deutsche Bank’s inaugural venture into holding a restricted assortment of cryptocurrencies and tokenized renditions of conventional financial instruments for its customers, a development confirmed by a spokesperson from Deutsche Bank.
However, the spokesperson clarified that crypto trading is not on the immediate agenda for the bank, despite hinting at such a possibility in a 2020 World Economic Forum document. This comes amidst the crypto markets grappling to bounce back from a series of downturns last year, which saw numerous leading crypto establishments facing collapses, thereby inflicting hefty losses on investors and triggering a global cry for heightened regulatory measures.
Despite the turbulent landscape, numerous mainstream financial entities continue to explore the potential of blockchain technology, the backbone of cryptocurrencies, in revolutionizing the trading and settlement processes of traditional financial assets.
Joining the ranks of Standard Chartered, BNY Mellon, and Societe Generale, Deutsche Bank is the latest to offer crypto custody solutions. Paul Maley, the Global Head of Securities Services at Deutsche Bank, emphasized the burgeoning significance of the digital asset sphere, which is anticipated to encapsulate trillions of dollars in assets, thereby emerging as a focal point for investors and corporations globally.
As per data from CoinGecko, the current valuation of the crypto market stands at approximately $1.1 trillion, witnessing a decline from its zenith of over $3 trillion in November 2021.
Maley further elaborated that the bank’s initiative extends beyond cryptocurrencies, aiming to support clients in navigating the expansive digital asset ecosystem. In light of warnings issued by U.S. regulators urging banks to remain vigilant of liquidity risks stemming from crypto-affiliated clients, Maley assured that Deutsche Bank is advancing with a prudent approach, adhering to the regulatory norms governing this asset category.
He affirmed the bank’s commitment to mitigating risks and preventing any adverse impact on the bank’s other operations through meticulous product design and a robust custody framework for clients.
