Germany’s Federal Financial Supervisory Authority, better known as BaFin, has received more than 40 applications from German banks seeking permission to become Bitcoin custodians.
Reported by local news outlet Handelsblatt, the intention of the banks to offer digital asset services on a mass level follows the introduction of a new regulatory law in the country.
BaFin updated its anti-money laundering rules at the beginning of this year, mandating banks to obtain a license from the regulator if they intend to offer services with online banking, including operations with stocks, bonds, or digital currencies.
For financial institutions already offering such services, the regulator has provided a transitional period until November 2020. However, they must notify BaFin about their intentions to obtain such a license by the end of March.
Regulations welcomed by the industry
Solarisbank in Berlin is one of the first financial institutions in the country to offer digital asset-based services. It even formed a dedicated digital asset subsidiary – Solaris Digital Assets – last December.
“We have been dealing intensively with the topic of crypto custody for a year and a half,” Michael Offermann, head of crypto banking at Solaris, told the German publication. “The new regulation in the new Money Laundering Act is a good time to start practically. After all, we are not a research institute, but a commercial bank.”
Germany’s approach to regulating the digital asset industry is also attracting international players to the country. Most recently, US-based crypto custodian BitGo established two entities in Europe – one in Germany and another in Switzerland.
The market regulator also recently clarified that the new cryptocurrency custody law will not only apply to German firms but also international companies with operations in the German market.