Landesbank Baden-Württemberg to offer crypto custody

Germany’s largest federal bank, Landsbanki Baden-Württemberg (LBBW), partnered with Austrian-based Bitpanda to provide “investment-as-a-service” infrastructure for cryptocurrencies. The new service will offer institutional and corporate clients the ability to store and procure digital assets such as bitcoin and ether.

Starting in the second half of 2024, the pilot phase of this initiative will include cryptocurrency custody and trading to address the growing demand for digital asset services among corporate clients. LBBW Board of Directors member Stefanie Münz said. “By offering crypto-asset custody, we are positioning ourselves with a clear added value for our corporate clients, while ensuring the highest security standards”.

Dr. Jürgen Harengel, COO of LBBW Corporate Bank, noted the increasing interest in digital assets among corporate customers which he expects to be integral to future business models. “The demand from our corporate customers for digital assets is increasing, and we are convinced that crypto assets will establish themselves as a building block for further business models,” he added.

The new alliance come hot on the heels of Bitpanda’s acquisition of a crypto trading and custody license from Germany’s Federal Financial Supervisory Authority (BaFin). The approval enables it to legally offer crypto custody and proprietary trading services in Germany.

This expansion mirrors moves by other players in the industry, such as Coinbase Custody, which opened an office in Ireland, and Fidelity Digital Assets, which launched a branch in the U.K. Germany’s largest lender, Deutsche Bank AG also applied for regulatory approval to operate as a cryptocurrency custodian in Germany. The Deutsche Bank’s digital asset custody prototype caters specifically to institutional clients to establish a seamless connection between them and the broader cryptocurrency ecosystem.

Germany has been creating a friendly environment for crypto custodians, passing laws that allow banks and crypto specialists to manage digital assets and offer related services. However, the regulatory landscape remains challenging, as seen with Binance, the world’s largest cryptocurrency exchange, which was compelled by the German regulator to withdraw its application for a crypto license.