After ignoring the adoption of cryptocurrencies for a very long time because of the risks and uncertainties associated with cryptocurrencies, German banks have now started embracing them. Germany has been very resistant to the adoption of cryptocurrencies because of their volatility and risky nature.
There were few foreign fintech companies like Bitwala, Bison, and Bitpanda providing their services in the country. These fintech firms are responsible for facilitating services like trading and custody and issuing cards and ATMs. Currently, no one can directly trade cryptocurrencies at any German bank. Even banking sector giants like Comdirect, Deutsche Kreditbank or ING do not allow their customers to trade cryptocurrencies directly via a broker. If anyone wants to trade in cryptocurrencies in Germany you need certificates that replicated cryptocurrencies.
However, recent reports depict some excellent news for crypto traders, and more institutions steadily started providing platforms for cryptocurrencies. A few days back, a German banking sector giant Bereberg predicted that Bitcoin could regain its position in the global general finance system. According to Bereberg, the environment in the United States puts almost every token at high risk of being classified as a subject of regulatory action. However, Bitcoin is an exception to this regulatory onslaught because of its distinctive nature, which is characterized by decentralization and openness.
In March 2023, Deutsche WertpapierServiceBank (Dwpbank) took a crucial step and decided to provide its affiliates with seamless integration with their current offerings, with more digital assets to come. According to reports, the new feature will present crypto accounts alongside bank customers’ other accounts that will not demand KYC norms. The platform has already been used by MLB Banking, the first Dwpbank affiliate to sign up for it.
Germany’s approach towards crypto management has remained very hazy as the regulatory bodies and lawmakers sometimes give contradictory statements. In December 2022, Mark Branson, President of the Federal Financial Supervisory Authority (BaFin), the financial regulator in Germany appealed to the global regulators to cooperate on sanctioning digital assets. However, before this statement, he raised his voice in favor of blockchain technology and called it as a future technology to change the financial sector. It will be interesting to see whether Germany will be able to develop itself as a global fintech hub or will remain restrained towards crypto.