One of the biggest banks in Europe is doing the work for creating a system for cryptocurrency custody and trading facility. Specifically, Deutsche Bank reported that, in the immediate term, it expects the business to be worth $24 trillion, rendering custodial service a much needed facility. The software that the bank plans to deploy in four phases is already being built.
The announcement was made by the German bank through an article published by the World Economic Forum in December. The announcement didn’t get much coverage at the instant, tucked deep within the 38-page paper. Cryptocurrency news site CoinDesk just discovered it, disclosing that before businesses like Tesla came in, Deutsche was into cryptocurrencies.
Tokenized variants of conventional assets actually account for just $5 billion, as per the study. This demand might rise to about $24 trillion over the next decade, the bank forecasts. That will render cryptocurrency custody facilities as the more often searched services.
Deutsche Bank plans to build a vertically integrated custody network that offers smooth access to the wider crypto-currency environment for institutional clients and their crypto holdings.
Deutsche bank – Germany’s biggest – aims to create a secure link between virtual assets and conventional banking services. The platform will enable users on one site to control their cryptocurrencies and fiat holdings. It plans to include an institutional-level storage solution to ensure the security of digital assets.
In four steps, Deutsche will introduce the virtual currency custody network. First, it would provide retail buyers with custody of vetted digital properties. Family offices, wealth managers, streaming funds and business funds are among others.
The platform will allow customers to purchase and liquidate digital assets in the second process. To achieve the objective, the bank would work with the prime brokers, in addition to vetted exchanges. Value-added facilities such as fund management and lending, taxes, voting and staking would be provided by the bank in the third level. The platform will also have an open banking network to allow third-party service providers to be onboard. Finally, it will provide capabilities for trading and even issuance.
Deutsche plans to render the site a single point solution for all the expectations of its consumers for digital assets, as the study reported.
A complete suite of managed banking facilities, including KYC/AML, other kinds of compliance, trading settlement and others, will be embedded with the platform. State-of-the-art UX and CX are going to be key. Deutsche Bank can help users centre their investment choices on what’s relevant. As a way of producing a differentiated product, this platform would concentrate on creating an easy to operate user interface.
Deutsche has already finished its PoC (proof of concept) and this year it plans to introduce the commodity. Being the eighth largest bank in Europe with reserves under administration of EUR 1.3 trillion, Deutsche has been a pro-digital currency for a while.
The bank predicted last month in its study that over the upcoming two years, digital currencies might be popular. It picked out the interactive yuan of China and the Libra of Facebook as notable successful ventures. The yuan will be open to 1.5 billion residents of China, while 2.5 billion users of social media platform Facebook will be able to use Libra.
In spite of this, if the increase in users of blockchain wallets proceeds to represent that of internet users, they would number 200 million in another 10yrs, four times the current count. This would be promoted by states, banks, businesses and payment suppliers, many of which would benefit from payment digitalization.
Deutsche follows other multinational financial giants in joining the cryptocurrency custody market. A month ago, Singapore’s top bank DBS reported a custodial facility. Other notable entities providing cryptocurrency custody are Spain’s second-largest BBVA Corporation, the Netherlands’ largest ING bank and the Swiss Stock Exchange.
Only two days back, BNY Mellon, the world’s largest custodial bank, revealed that it will be introducing a Bitcoin custody operation. All the top cryptocurrencies would be sold by the fund, which manages $41 trillion worth assets.
