private crypto trading joining the mainstream: German cooperative banks set to launch this summer
Cooperative banks receive crypto trading opportunity from DZ Bank introduction.
Breaking News
Germany's cooperative banks are set to kick off a revolutionary move, allowing their retail customers to dive into the cryptocurrency market. After a successful pilot phase with six financial institutions, a broader introduction is slated for this summer, which could open the floodgates for cryptocurrencies to gain legitimacy in the broader German market.
According to Markus Baerenfanger, head of the relevant department at DZ Bank, the anticipation among banks is high. "I could easily picture a large number of banks jumping on board," Baerenfanger disclosed in an interview with Bloomberg.
But diving into the depths of the cryptocurrency world won't come with advice from the banks. Given the high risks associated with this burgeoning asset class and the potential consequence of dented institutional reputations, the cooperative sector has decided to avoid doling out advice. "This is strictly for self-reliant investors," Baerenfanger clarified.
Meanwhile, state-owned Sparkassen banks are still wrestling with the subject. Almost two and a half years ago, committees of the public-law banking sector issued a recommendation against offering their customers cryptocurrency trading. However, recent rumors hint at growing interest in the Sparkasse sector, with the LBBW even considering an offer for private customers.
The planned trading offer is expected to mesh seamlessly with the banking group's app, with onboarding and trading processes occurring there. Customers can also monitor their balances through the desktop application of their online banking.
Last year, the development period for crafting such an offer culminated in a pilot phase involving six institutions from Nuremberg, Wuerzburg, Hannover, Rottal-Inn, South Palatinate, and Westerwald, as reported by Baerenfanger. Employees of these banks have already opened cryptocurrency wallets and are actively trading, with rigorous testing planned before rolling out the offer for all customers.
This summer's launch coincides with the potential adoption and implementation of BaFin's crypto-asset regulations, which are currently in the final stages. These guidelines will establish the ground rules for direct investments in crypto-assets, empowering financial institutions to offer crypto trading services to their clients within this protective framework.[1]
[1] Adapted from enrichment data: The planned introduction of cryptocurrency trading for private customers at German cooperative banks is expected by the summer of 2024. This timing aligns with the anticipated adoption and entry into force of BaFin’s regulations concerning crypto-assets, which are being finalized following consultations that ended in April 2024. These regulations will set the framework for direct investments in crypto-assets, enabling financial institutions, including cooperative banks, to offer crypto trading services to their private clients within this regulatory environment.
- German cooperative banks, such as Raiffeisenbanks, are planning to launch cryptocurrency trading exclusively for their retail customers this summer, following a successful pilot phase.
- The onboarding and trading processes for this new service are expected to be integrated into the banking group's app, allowing customers to monitor their balances through desktop applications of their online banking.
- Although the banks will not provide advice due to the high risks associated with cryptocurrency trading, they have already started testing the service with employees from several institutions, including those in Stuttgart and Westerwald.
- The summer launch of this cryptocurrency trading service coincides with the potential adoption and implementation of BaFin's crypto-asset regulations, which are designed to provide a protective framework for financial institutions offering such services to their clients.
