DZ Bank, Germany's second-largest provider of financial services, is getting ready to enter the cryptocurrency asset management market. It has chosen the Swiss custodian Metaco as its partner in this endeavor.
According to a reports, the custody platform Harmonize operated by Metaco, will be the key entity that DZ Bank utilizes.
As a result of the rise in demand from clients, several different financial institutions have already begun investigating potential entry points into the emerging crypto sector.
Even if every single bank has its own one-of-a-kind strategy for entering the world of cryptocurrencies, the legislative permits that vary from country to country make banks like DZ appear to have a competitive advantage.
After delaying the announcement for such a lengthy period, DZ Bank stated (1) that it chose Metaco as its partner because of its security and scalability advancements.
"With the service we can build via this new tech, we trust to generate durable and rapidly growing commercial relations as well as an appealing remedy for our clients," said Nils Christopeit, an executive at DZ Bank. "This solution can also fulfill the needs of digital currencies & DeFi Institutions."
Many experts in the sector believe that the presence of mainstream banking institutions is still a critical trigger for driving widespread acceptance of digital assets.
This is the case even though these firms provide severe competition. Some investors in the market today have chosen not to participate since the financial institutions they put their faith in have yet to provide solutions for cryptocurrencies.
DZ Bank will allow access to millions of users to explore coming into the cryptocurrency ecosystem with its service if it has the appropriate user base and is aligned with the rules that are already in place.
Craig Perrin, Chief Sales Officer at Metaco, stated, in response to a question regarding the partnership, that the company's primary business is tailored to assist in driving institutional acceptance of digital currencies:
"We are thrilled to announce this cooperation as it will further establish Metaco as a market leader in Germany. The partnership has the trust of some of the top banks and exchanges in the country,"
Handling of Crypto Assets and Regulatory Aspects
The United States Securities and Exchange Commission (SEC) has issued a rule amendment to guide new entrants into the market in the United States. This is in response to the fact that many jurisdictions retain varied regulations regarding cryptocurrency custody.
Fidelity Investments, BlackRock, and even Goldman Sachs Group Inc (NYSE: GS), three of the most prominent institutional investors in the United States, are increasingly exploring options to offer crypto asset management and custody services for their respective clientele.
These products are developed to provide direct rivalry to industry heavyweights such as Coinbase Custody & Gemini Custody, amongst others.
The SEC has adopted a new regulation requiring companies that provide custody services to clients to prove that the accounts used to hold their clients' capital are kept completely separate from the company's other operations.
If this rule change is made, it will assist in averting comparable crises, such as the internal money mismanagement that Sam Bankman-Fried was responsible for just before the FTX Derivatives Exchange went bankrupt.