Deutsche Bank has joined forces with Swiss startup Taurus to embark on a journey into the world of digital asset custody and tokenization services. This strategic collaboration marks a significant step for Germany’s largest lender, signaling its intent to navigate the evolving landscape of blockchain technology and cryptocurrencies.
The German banking giant’s foray into the crypto sphere began to take shape in early 2021 when hints of a digital asset custody prototype surfaced in a report by the World Economic Forum. Fast forward to June 2023, and the bank officially applied for a crypto custody license from Germany’s financial watchdog, BaFin. David Lynne, the head of Deutsche Bank’s commercial banking arm, emphasized their focus on expanding the bank’s digital assets and custody business. Once authorized, the license will empower Deutsche Bank to offer secure custody services for digital assets, including cryptocurrencies, in highly secure offline or online storage solutions.
The clarity provided by Germany’s crypto asset custody regulations, along with Europe’s proposed Markets in Crypto-Assets regulation (MiCA), has paved the way for traditional financial giants like Deutsche Bank to explore this burgeoning sector. To strengthen its position, Deutsche Bank invested in Taurus as part of a $65 million Series B funding round in February, alongside Credit Suisse, Arab Bank Switzerland, and Pictet Group.
Taurus co-founder Lamine Brahimi shed light on the journey to this partnership, stating that Deutsche Bank’s due diligence on potential crypto custody firms commenced at the end of 2021 and concluded in 2022. “We won the deal a couple of quarters ago, so the bank became a client and then decided to take a stake in Taurus,” Brahimi revealed. This partnership doesn’t merely focus on cryptocurrencies but extends to tokenization of assets, offering the bank flexibility to tokenize assets and provide asset servicing as deemed appropriate.
Deutsche Bank’s global head of securities services, Paul Maley, shared insights into their vision for the future. “In the first instance, we will offer custody for selected cryptocurrencies and some stablecoins. We expect the first wave of activity to be around these selected cryptocurrencies and stablecoins. However, we see the opportunity in the broader emergence of tokenized financial assets,” Maley affirmed.
This strategic partnership between Deutsche Bank and Taurus not only solidifies the bank’s commitment to embracing the digital asset revolution but also positions it as a frontrunner in the realm of crypto custody and tokenization. It’s strategic moves in the crypto arena signal not only its intent to embrace innovation but also its recognition of the transformative potential of blockchain and digital assets in the financial world.