Blockchain Technology

Institutional Investor Custody Platform Launched by Germany’s DZ Bank

Narrative Highlights

  • The third-biggest bank in Germany, DZ Bank, is introducing a blockchain-based digital asset platform.
  • At first, the platform will provide custody for digital assets, such as a Siemens cryptobond.
  • Additionally, DZ Bank is requesting from BaFin a crypto custody license.

DZ Bank, the third-biggest bank in Germany, is getting ready to introduce a cutting-edge platform that will use blockchain technology to manage digital financial assets.

The goal of this new platform is to offer crypto assets a secure storage solution. Siemens’ cryptocurrency bond is one of these assets; six months prior, DZ Bank and Union Investment expressed interest in it.

In a calculated move, DZ Bank is applying to the Federal Financial Supervisory Authority (BaFin) for a crypto custody license. Institutional customers will be allowed to investigate cryptocurrencies, including the well-known Bitcoin, thanks to this step.

Taking the Lead

The third-biggest bank in Germany, DZ Bank, is among the first to introduce a blockchain-based platform for digital financial instrument processing and custody. With this change, the bank’s institutional clients will be able to benefit from distributed ledger technology’s (DLT) advantages for capital market operations.

The new platform from the German cooperative will initially provide custody for digital assets, such as a Siemens cryptobond. Additionally, DZ Bank is currently applying to the Federal Financial Supervisory Authority for a crypto custody license, which would allow it to let institutional and individual clients invest in cryptocurrencies.

Professional Views

DZ Bank’s Head of Digital Custody and Securities Services, Dr. Holger Meffert, offered his thoughts on the project.

It is anticipated that a substantial segment of capital market transactions would be handled using infrastructures based on distributed ledger technology (DLT) in the next 10 years. We view distributed ledger technology (DLT) as an adjunct to the current capital market processes’ established infrastructures in the medium run.

Blockchain Technology: A Victory!

After adopting blockchain technology for many years, DZ Bank is currently developing a digital custody platform to provide institutional clients with the ability to take care of their own cryptocurrency assets, including a Siemens bond. The bank sought for a crypto custody license from BaFin in June as part of its entry into the cryptocurrency market, and it was also developing a way for individual customers to invest in cryptocurrencies.

DZ Bank is actively taking part in the European Central Bank’s (ECB) research phase, where they are testing the settlement of large-volume capital market transactions using central bank currency, adding to their remarkable list of efforts.

Do you believe that additional banks ought to adopt blockchain technology and follow DZ Bank’s example?

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