By
Godfrey Benjamin
May 10th, 2024
With the right user base and its alignment with existing regulations, DZ Bank will open access to millions of users to consider getting into the crypto ecosystem with its offering.
DZ Bank, the second-largest financial services provider in Germany is set to dive into the crypto asset management niche and it has named Swiss custodian Metaco as its partner. As reported by CoinTelegraph citing statements shared by the duo, Metaco’s custody platform Harmonize will be the primary outfit that will be used by DZ Bank.
Several financial institutions are already exploring avenues to get into the nascent crypto world owing to the growth in demand from customers. While different banks have their own unique strategies for getting into the crypto world, the regulatory permissions from one country to another are making banks like DZ look more competitive.
Having taken this long to reveal its intentions, DZ Bank said it handpicked Metaco as its partner because of the firm’s advances in security and scalability.
“With the offering we can build by using this technology, we trust to create a durable and fast-growing business cooperation as well as an attractive solution for our clients that can also meet the requirements of digital currencies and decentralized financial instruments,” said Nils Christopeit, an executive at DZ Bank.
Despite the tough competition that mainstream banking firms provide, many industry leaders still consider their presence as a crucial catalyst to drive mainstream adoption of digital assets. Today, there are investors who have remained on the sidelines because the banks which they trust are not offering crypto solutions.
With the right user base and its alignment with existing regulations, DZ Bank will open access to millions of users to consider getting into the crypto ecosystem with its offering. Commenting on the partnership, Metaco’s Chief Sales Officer, Craig Perrin said the firm’s core business is optimized to help drive institutional adoption of digital currencies:
“We are excited to announce this cooperation as it further establishes Metaco as a market leader in Germany, trusted by some of the country’s largest banks and exchanges.”
Crypto Asset Management and Regulation
With different jurisdictions maintaining different regulations, as it concerns crypto custody, the United States Securities and Exchange Commission (SEC) has released a rule change to guide entrants into the industry in the United States.
Top institutional investors in the US including Fidelity Investments, BlackRock, and even Goldman Sachs Group Inc (NYSE: GS) are gradually exploring avenues to offer crypto asset management and custody services for their clients. These offerings are designed to offer direct competition to industry heavyweights such as Coinbase Custody and Gemini Custody amongst others.
Per the new rule change, the SEC wants custody service providers to provide proof that accounts for customers’ capital in custody are well segregated from that of the company’s other activities. This rule change, if adopted, will help prevent related crises such as the internal fund mismanagement by Sam Bankman-Fried prior to the bankruptcy of his trading platform, FTX Derivatives Exchange.