In a significant move towards mainstream crypto adoption, Germany’s largest state-backed lender, Landesbank Baden-Württemberg (LBBW), has announced plans to offer cryptocurrency custody services through a partnership with Austrian exchange platform Bitpanda. The strategic alliance aims to cater to the growing demand for digital assets among LBBW’s corporate clients, positioning the bank as an early mover in the rapidly evolving crypto landscape.
TLDR
- Germany’s largest state-backed lender, Landesbank Baden-Württemberg (LBBW), has partnered with Austrian crypto exchange Bitpanda to offer crypto custody services.
- The partnership will allow LBBW to provide “Investment-as-a-Service” infrastructure to store and procure cryptocurrencies like Bitcoin (BTC) and Ether (ETH) for its corporate clients.
- The crypto custody services are planned for market launch in the second half of 2024, initially targeting institutional and corporate clients.
- LBBW cited increasing demand from corporate clients for digital assets as the driving force behind the move, positioning it as a value addition.
- The development comes as German banks prepare for the upcoming Markets in Crypto-Assets (MiCA) regulations, set to take effect in December 2024, which will establish a comprehensive legal framework for the crypto industry in the European Union.
The partnership will see LBBW leveraging Bitpanda’s “Investment-as-a-Service” infrastructure to securely store and procure cryptocurrencies like Bitcoin (BTC) and Ether (ETH) on behalf of its institutional and corporate customers. Stefanie Münz, a member of LBBW’s board of directors responsible for finance, strategy, and operations, highlighted the bank’s commitment to providing added value to its clients while maintaining the highest security standards.
“By offering crypto-asset custody, we are positioning ourselves with a clear added value for our corporate clients – while ensuring the highest security standards,” Münz stated in a press release.
“Bitpanda provides the necessary technical and regulatory infrastructure to offer our customers innovative and, above all, secure solutions in the area of digital assets.”
New partnership alert: Bitpanda x LBBW 🤝
Landesbank Baden-Württemberg, Germany's largest federal state bank will enhance their digital asset offering in partnership with Bitpanda!
Bitpanda Technology Solutions provides LBBW with an "Investment-as-a-Service" infrastructure in… pic.twitter.com/hIwNXp9Wp4
— Bitpanda (@Bitpanda_global) April 15, 2024
The decision to embrace crypto custody services comes in response to the increasing demand from LBBW’s corporate clients for exposure to digital assets. Jürgen Harengel, Chief Operating Officer of Corporate Bank at LBBW, acknowledged this trend, expressing the bank’s belief that cryptocurrencies will establish themselves as a building block for further business models.
“The demand from our corporate customers for digital assets is increasing. We are convinced that crypto assets will establish themselves as a building block for further business models. With the cooperation, we are creating the technical and regulatory basis at an early stage to best support the individual crypto strategies of our corporate customers,” Harengel said.
The partnership between LBBW and Bitpanda is slated for a market launch in the second half of 2024, initially targeting corporate clients. This strategic move positions LBBW as one of the first major German banks to offer crypto custody services, capitalizing on the growing institutional interest in digital assets.
Germany's largest federal state bank, LBBW, has partnered with @Bitpanda_global to offer crypto custody services. @iamsandali reports.https://t.co/ELpK7Y2Fkt
— CoinDesk (@CoinDesk) April 15, 2024
The timing of LBBW’s foray into crypto custody services is particularly significant as German banks and financial institutions prepare for the implementation of the European Union’s Markets in Crypto-Assets (MiCA) regulations. Set to take full effect in December 2024, MiCA will establish the first comprehensive legal framework for the crypto industry within the EU, regulating crypto-asset service providers (CASPs), including crypto exchanges.
According to Vyara Savova, a senior policy lead at the European Crypto Initiative, 2024 will be a pivotal year for the crypto industry in the EU. “2024 is the year of MiCA, and the whole EU will now have a comprehensive legal framework for crypto-assets, crypto-asset services, and crypto-asset service providers (also known as CASPs). Crypto exchanges are a type of CASP under MiCA and will become fully regulated in December 2024,” Savova explained.
LBBW’s move to offer crypto custody services aligns with the broader trend of traditional financial institutions embracing digital assets in anticipation of the forthcoming regulatory framework. Deutsche Bank, for instance, has been working on digital asset custody services since September 2023, partnering with Swiss crypto startup Taurus. Similarly, DZ Bank, Germany’s second-largest bank, announced plans to launch a crypto trading pilot later in 2024, following the unveiling of its digital asset custody platform in November 2023.
As the crypto industry continues to gain mainstream acceptance, the entry of major players like LBBW into the realm of digital asset custody services signifies a significant milestone. By partnering with established crypto exchanges like Bitpanda, traditional financial institutions are acknowledging the growing demand for crypto exposure among their clients and positioning themselves as pioneers in this rapidly evolving space.
