Deutsche Bank starts crypto custody for institutional clients

Deutsche Bank launched its digital asset custody service on Wednesday for paying institutional and corporate clients in Europe, opening the service after years of preparation and a license under the European Union's Markets in Crypto-Assets regulation. The bank manages wallets and private keys on clients' behalf, Cointelegraph reported.

The service initially supports Bitcoin, Ether and three stablecoins: Circle's USDC and EURC, plus EURAU from AllUnity, a joint venture the bank backs, according to Decrypt. Clients can store and transfer those assets. Tokenized financial instruments sit on the roadmap but are not part of the first release.

Deutsche Bank also signed a memorandum of understanding with Deutsche Asset Management, its majority-owned money manager formerly known as DWS, to explore cooperation on tokenized money market funds, crypto exchange-traded commodities and stablecoins, the same Cointelegraph report said. Deutsche Asset Management oversaw about 1.22 trillion euros as of Sept. 30, Decrypt reported.

The target clients span the bank's corporate and investment banking units: corporations, asset managers, hedge funds, custodians, brokers and sovereign institutions, a group named in the September announcement of the plan, Decrypt said. The setup uses hardware-based key protection, multi-person approvals and separate warm and cold storage, according to the bank.

Paul Maley, Deutsche Bank's global head of trust and securities services, framed the ambition in wide terms. "In the medium term we aim to deliver a fully integrated, regulated ecosystem that supports the custody, tokenisation, and settlement of digital assets," he said, as quoted by Decrypt.

Regulatory clearance came first. The bank's listing for crypto custody and transfer services in the EU's MiCA register is dated Oct. 12 and names Germany's BaFin as its regulator, Cointelegraph noted. Deutsche Bank announced the plan to offer the service to institutional and corporate clients in Europe on Sept. 16, pending regulatory clearance, and applied for a German digital asset custody license back in 2023.

Timing beyond Europe is already on the calendar. Gerald Podobnik, co-head of Deutsche Bank's corporate bank, told Reuters in October that the bank planned to launch in Germany before expanding to Asian financial centers in 2027, Cointelegraph reported. Decrypt separately said the bank has stated plans to expand the custody service to Asia.

The build drew on outside technology. Deutsche Bank partnered with crypto infrastructure provider Taurus in 2023 to develop custody services, and reports last year said the bank also planned to use technology from Bitpanda alongside Taurus, according to Decrypt.

The project is old by crypto industry standards. Deutsche Bank began readying a crypto custody and trading platform at least as far back as 2021, Decrypt said, and it received authorization from BaFin under MiCA, the EU rulebook that requires crypto service providers to hold a license before serving customers in the bloc. The bank announced its intention to serve institutional and corporate clients in Europe in September, but only after the authorization was in hand did the service open to paying clients this week.

For now the offering stops at custody and transfers. Tokenized financial instruments remain on the roadmap rather than in the live product, Decrypt said, which keeps the first phase narrower than the integrated ecosystem Maley described as the medium-term goal. Clients holding the stablecoins get access to tokens issued outside the bank's balance sheet: USDC and EURC come from Circle, while EURAU comes from AllUnity, the Deutsche Bank-backed stablecoin venture.

The custody launch is one of several crypto moves by the bank. Deutsche Bank is among global lenders including Goldman Sachs and Citi that are backing a $270 million challenge to dominant stablecoin issuers, Decrypt reported. The bank cautioned that its custody service does not protect clients against swings in the value of digital assets, fraud or failures by other market participants.