Deutsche Bank to custody digital assets in Europe
Deutsche Bank has announced it will by custody digital assets for institutional and corporate clients in Europe this year after it completes all the applicable regulatory requirements. The custody will be for selected digital assets including Bitcoin, Ethereum, USDC. The initial target group comprises clients of Deutsche Bank’s Corporate Bank and Investment Bank, including corporate, asset managers, hedge funds, custodians, brokers and sovereign institutions. Client on boarding will be subject to the bank’s criteria, due-diligence requirements and risk appetite.
Gerald Podobnik, Co-Head Corporate Bank, Deutsche Bank noted that digital assets wont replace traditional financial systems but complement them. He explains, ” We see them as new rails that can coexist with existing market infrastructures while benefiting from the trust, security and safeguards that regulated financial institutions provide. Our aim is to offer clients a secure and regulated gateway to this evolving market. The service will be further developed in line with client demand, regulatory requirements and the bank’s risk appetite.”
The new digital asset custody solution will allow clients to safeguard their digital assets and transfer digital assets to third parties. Deutsche Bank will manage the wallets and private keys on clients’ behalf. This will reduce the need for clients to build and maintain their own custody infrastructure.
At launch, Deutsche Bank will support a selected range of digital assets, including Bitcoin and Ether, as well as selected stable coins or e-money tokens, including USDC and EURC, EURAU. The range of supported assets may be expanded over time, subject to client demand and the bank’s product-approval, risk management and regulatory processes. Tokenized financial instruments are also included in the road map.
Deutsche Bank’s solution has been designed around multiple layers of security and operational control within a strict governance. These include secure key generation and hardware-based protection, segregation of duties, multi-person approval processes, separate warm and cold storage environments, a redundant technical setup, and controlled backup and recovery arrangements.
The new service will use selected external technology and infrastructure providers for defined technical components.
