Traditional financial institutions have recently discovered the cryptocurrency business for themselves thanks to a recent regulatory change. Bankhaus von der Heydt wants to enter the token business with the help of the fintech sector.
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Crypto business with fintech companies
Bankhaus von der Heydt is one of the oldest private banks in Europe. The traditional bank wants to keep up with the times and make it’s business more efficient by tokenizing securities and bonds, i.e. by using blockchain technology with the help of the fintech sector. On the other hand, von der Heydt is also planning to launch a digital euro on the market in this context.
This stable coin is thus to be linked to the euro exchange rate. In addition, the bank also intends to become active in the field of crypto safety in the future. For this von der Heydt, as the bank reported in a press release, it cooperates with the fintech enterprise Bitbond from Berlin.
Important regulatory changes
Since January 1st, 2020, there has been an important regulatory change in the crypto market. As a result of the Act Implementing the Amending Directive to the Fourth EU Money Laundering Directive, crypto custody has been included in the German Banking Act (KWG) as a separate financial service.
Since the beginning of the year, anyone wishing to hold cryptocurrencies and assets in safekeeping has therefore required a license from the Federal Financial Supervisory Authority (BaFin). Although there are transitional provisions for companies that have previously offered this new, proprietary financial service, the requirements for the safekeeping of cryptocurrencies, the crypto market, which has so often been criticized for its lack of regulation, is becoming more stringent.
In addition, the separation requirement has been lifted, which previously prohibited the custody of cryptocurrencies such as Bitcoin, Ethereum, Litecoin & Co. and the trading of traditional investments from a single source. Since this means that cryptocurrencies can be offered by regulated, reputable market participants, this development could make the crypto market more interesting for investors who previously worried about the security and seriousness of such offers.
Cooperation with Bitbond
Banhaus von der Heydt is cooperating with fintech Bitbond for the implementation of the plans. The Berlin-based company has been working in the field of blockchain-based financial services since 2013 and is considered a pioneer in the industry. Last year, Bitbond was the first company in the country to carry out a Security Token Offering (STO) with a securities prospectus approved by BaFin.
For both companies, the joint project is a significant step. Philipp Doppelhammer, Managing Director of the Munich-based bank, said: “One of the greatest strengths of von des Heydt’s bank is its ability to react very quickly and flexibly to technological innovations. The bank has been observing blockchain technology with regard to financial service solutions for quite some time now, as it believes that the fintech sector will offer our customers an extremely high added value. Bank representatives are therefore very pleased that asset tokenization is now ready for the market from a regulatory and technological perspective and hope that, as one of the first providers of crypto safe solutions in the market, it will gain a decisive strategic advantage over large and less agile universal banks.”
A significant step for both companies
Bitbond is also pleased about the cooperation: “The company is working with several banks and financial intermediaries on various projects in the area of tokenization and custody of digital assets. Bitbond is particularly pleased to be working with von der Heydt, as this bank is one of the first to use blockchain technology in the area of securitization and private placements. The company assumes that many banks will follow this example. Bitbond is pleased to be able to work with such a proven industry expert,” quoted Bitbond boss Radoslav Albrecht in the bank’s press release.
The regulatory framework that has been created for the safekeeping of cryptocurrencies will certainly make the use of the blockchain interesting for other financial institutions in the near future and allow them to enter the token business.
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First published in finanzen.net, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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