Deutsche Bank strikes partnership with Taurus to offer digital currency custodial services

German banking giant Deutsche Bank (NASDAQ: DB) is set to provide its institutional clients with digital asset custody services after partnering with Swiss-based Taurus.

The move will see Germany’s largest lender hold digital assets like BTC and Ethereum (ETH) for clients after months of consultation with regulators. In June, the company announced that it had received a digital custody license from Germany’s lead financial agency, BaFin.

According to the disclosure, the new partnership will not see Deutsche Bank offer trading services for its clientele but could see the bank delve into the tokenization of assets. The bank notes that Taurus’ wealth of experience in the ecosystem makes it the ideal partner to explore new digital horizons.

Deutsche Bank’s global head of securities, Paul Maley, said custodial service will be rolled out in phases, noting that the bank would only offer custody for select digital currencies before increasing its scope to include stablecoins and exploring tokenized financial assets.

“As the digital asset space is expected to encompass trillions of dollars of assets, it’s bound to be seen as one of the priorities for investors and corporations alike,” said Maley.

Maley added that the bank had taken great care with its product design to avoid “contaminating” its other banking activities, stressing that the custodial service complies with existing regulations to protect consumers.

“This partnership is the result of a thorough and detailed selection and due diligence process where Taurus was able to demonstrate the quality and breadth of its products and technology,” said Taurus’ co-founder Lamine Brahimi.

“We are pleased to implement this global partnership with Deutsche Bank and look forward to supporting the bank in launching digital assets and DLT-based products and services across several booking centers.”

The bank’s relationship with digital assets dates back to 2021, after the bank first shared its ambitions at the World Economic Forum (WEF). In the following months, Deutsche Bank continued its digital currency exploration, culminating in the receipt of custodial licenses from BaFin.

BNY Mellon (NASDAQ: BK), Standard Chartered (NASDAQ: SCBFF), and Societe Generale (NASDAQ: SCGLY) form part of an exclusive list of global investment banks that currently offer digital currency custodial services.

Aligning with the EU’s rule

Aside from complying with local financial rules, Deutsche Bank says its offering aligns with the European Union’s Markets in Crypto Assets (MiCA) regulation. The landmark rule, signed into law in June, introduces several seismic changes in Europe’s digital currency landscape but is set to take effect sometime in 2024.

MiCA offers new classifications for digital assets, requiring digital asset issuers to publish detailed whitepapers and mandating stablecoin issuers to disclose proof of funds. However, experts say that MiCA is not an attempt to “reinvent the wheel” but to build on existing safeguards to strengthen regulatory control.

Watch: Head of Unit, Digital Innovation and Blockchain at DG Connect, European Commission Pēteris Zilgalvis on Blockchain Policy Matters