BaFIN, Germany’s answer to the FCA, has been getting applications, as many as 40, from German banks that seeks its permission in becoming Bitcoin custodians. This new move toward crypto custody by German banks is paralleled by the newly introduced regulatory law.
BaFIN recently updated the anti-laundering law, decreeing that banks have to apply for a license from the watchdog if they wish to offer online banking services with stocks, bonds, and/or crypto coins. Those firms that already hold such an approval must abide by these recent changes; in such cases the overseer has provided a transitional period until November 2020, during which said companies must adapt their policies to the new AML.
BaFIN also wants to make sure that the custody law applies to all firms operating within Germany, not just local firms, but international ones with operations on German soil.
This move towards a heavier crypto regulation has attracted international players to the country, who are considering to open branches to their own companies. The United States crypto custodian BitGo has already two established European divisions. One is Switzerland and another in Germany.
As of now, there are some financial institutions offering digital-asset based services, including crypto coins. One of the first major names to do so is Solarisbank in Berlin. It even created created its own digital asset subsidiary in December last year- Solaris Digital Asset.