The relentless march of traditional finance into blockchain territory continues apace, outside of the U.S. at least. Yesterday, German banking giant Deutsche Bank announced a global partnership with Swiss blockchain infrastructure provider, Taurus, according to a press release.
The collaboration will see Deutsche use distributed ledger technology (DLT) provided by Taurus to enable custody and management of cryptocurrencies and tokenized assets for its customers. According to some reports, this will be limited to institutional clients, a select number of cryptocurrencies, and tokenized versions of traditional assets.
The partnership is said to be the result of a “detailed selection and due diligence process,” and be led by customer demands in a changing market, as Deutsche Bank’s Global Head of Securities Services Paul Maley explained:
“As the digital asset space is expected to encompass trillions of dollars of assets, it’s bound to be seen as one of the priorities for investors and corporations alike. As such, custodians must start adapting to support their clients.”
Deutsche Bank has long shown an interest in getting into the blockchain space, and participated in a $65 million series B fundraising round for Taurus in February this year. As we Observed at the time, the bank’s Singapore arm also completed a proof of concept for a digital asset fund management platform, Project DAMA.
However, Dr. Julian Hosp, CEO of Southeast Asia’s Cake Group, questioned whether there was any need for such a move. Hosp’s post on X pointed out that everybody in Germany could already buy bitcoin, either via an exchange-traded fund (ETF) or on an exchange. This means that banks such as Deutsche entering the space, according to Hosp, were just rerouting existing demand and bringing in no additional money or people.
The majority of responses, however, disagreed with Hosp, notwithstanding the fact that the announced partnership purportedly covers more than just the ability to buy and custody bitcoin, and is global rather than limited to German customers.
Big banks, argued many, brought in a completely different target audience, and a change in mindset of those not already versed in crypto. Whereas previously, relationship managers have not been able to offer crypto services (as they have not been available), now they will be able to recommend them to suitable clients.
Investing via a bank also gave crypto an additional level of trust, suggested others, and was far less intimidating than either self-custody or an ETF. This is especially true for those of the baby boomer generation, people aged 60+, who may be less comfortable with technology, but have significant capital to invest.
Whatever your opinion may be, Deutsche Bank’s entry into the market is certainly a sign of the times and shows how far along institutional interest into crypto has come. Now if somebody can just convince the U.S. SEC that blockchain isn’t the devil incarnate…