German banks on digital currency

German private bank to set up digital currency trading and custody services

A German private bank has announced its foray into the digital currency industry, launching a custody and trading service. Donner & Reuschel, one of Germany’s oldest banking institutions, cited high demand from its customers as a key factor behind the move.

Founded in 1798, Donner & Reuschel specializes in private banking, with over €9 billion ($10.7 billion) in assets under management. It’s based in Hamburg, with offices all over Germany and a subsidiary in the neighboring Luxembourg.

In its announcement, the bank revealed that it intends to set up the desk as soon as possible. Once the custody service is up, the bank will move on to tokenization of assets. It predicts that there will be a major shift in the finance industry towards tokenized assets and it wants to be positioned to benefit from this shift.

The bank has enlisted DLC Distributed Ledger Consulting GmbH as its consultant partner.

Commenting on the new services, Marcus Vitt, the bank’s spokesperson stated, “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.”

Vitt further touted the potential that blockchain technology has to transform the banking industry. He added, “Blockchain technology will result in the greatest structural change in the financial industry that I have been able to experience so far in my 20-year banking career. And of course we want to ensure that both our customers and the bank benefit from this change in the best possible way.”

Donner & Reuschel becomes the latest financial institution to venture into digital asset custody. Still in Germany, the country’s largest bank (Deutsche Bank) has been building a custodial solution for months now. It revealed the solution in a report by the World Economic Forum. It intends to bridge the gap between digital assets and the traditional financial system.

Elsewhere, the world’s largest custodian bank, Bank of New York Mellon, is venturing into the industry as well. The bank, which has $41 trillion in assets under its custody, announced that it’s launching a digital asset custody service this year.

Mike Demissie, the head of advanced solutions at the bank remarked, “It will be driven by client interest and demand, and we will also stay tuned to regulatory activity to make sure we are supporting assets that are allowed in a particular market.”

See also: CoinGeek Live panel, The Future of Exchanges & Trading in a Tokenized World

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