40 banks apply for cryptocurrency custody service licenses, can Germany become the country of choice for the crypto industry?

According to a report by Trustnodes on February 8, a recently passed law in Germany seems to have triggered a market boom, with a local newspaper saying that 40 licensed banks have applied for crypto hosting and services.

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The Fifth European Money Laundering directive, which went into effect on January 1, this year, updated legal provisions and covered crypto services, allowing banks to treat Bitcoin or Ethereum as stocks or bonds, thereby providing relevant Services.

This also applies to tokens, as the definition of cryptocurrency by law is very broad, which is "a digital representation of value that is not issued or guaranteed by a central bank or public institution, and is not necessarily affiliated with legal currency, does not have monetary or monetary legal status , But accepted by a natural or legal person as a means of transaction that can be transferred, stored and traded electronically. "

This means that banks can now offer the buying and selling and storage of tokens such as Bitcoin, Ethereum or MKR, just like stocks and other asset services. Frank Schaffler, a member of the German Parliament, said:

"The high demand for crypto hosting licenses indicates that companies are increasingly adopting blockchain technology, but this is also the result of new regulations."

The German Business News (Handelsblatt), known as the "German Financial Times" and "Wall Street Journal", reported on German securities regulators "Bafin", citing government officials, "has received 40 Letters of intent from a number of banks wishing to be allowed to operate cryptocurrency custody business in the future. "

They did not disclose the names of the banks, but they said that their goal is to make Germany the region of choice for the crypto industry.

As Brexit may mean that London financial services (including cryptographic services) no longer have passport rights, a second base needs to be established in continental Europe, and a competition is likely between Paris, Frankfurt, Amsterdam and Dublin Expand.

With the European Central Bank (ECB) headquartered in Frankfurt, this could have huge appeal for financial companies, and the new law will push the European Central Bank in that direction. German government officials said good financial market regulation could be a location factor, and the media quoted them as saying:

"We almost have a unique selling point that helps us bring reputable suppliers to Germany."

The report mentions that one of the applicants is a fintech company Solarisbank that has obtained a banking license.

Solarisbank created a company called Solaris Digital Assets to provide token storage services. Therefore, if the escrow license application is successful, it will store Bitcoin and other cryptocurrencies on behalf of the customer. Michael Offerman, Solarisbank's head of crypto banking, said:

"For a year and a half, we have been studying the issue of cryptocurrency custody. The new provisions in the new" Anti-Money Laundering Law "are a good time to start. After all, we are not a research institution, but a commercial bank."

Some private banks provide crypto services mainly to the rich, but as far as we know, no major bank provides such services for the time being.

It remains to be seen whether a German retail bank will become the first bank in the world to provide crypto custody services, but Europe's largest economy is in a very good position to take advantage of crypto finance and the technological revolution.

This is because Berlin is known as the hacking capital of the world, and Germany itself has almost as many nodes as the United States.

Berlin is becoming a sanctuary for Western dissidents, especially "dissident" programmers, to explain this, as Germany is a Western free country that is very sensitive to privacy and is usually not subject to the jurisdiction of the United States.

As a result, they own the technology they have, and they may play a more important role in euro trading as London exits. This can make cryptocurrencies a predictable fintech hotspot.

The third factor is that Germany remains a manufacturing country with an important industrial base. In fact, one of their biggest energy companies has been very supportive of Ethereum since the earliest.

Its only drawback is the lack of an English language, but now no matter where you are in Northern Europe, especially in the business and technology fields, English is almost a native language for many people, partly because they seem to have been from a very early age Start teaching their students to learn English.

Combining the three factors of programmer focus, the financial center of Frankfurt, and the industrial power, plus cryptocurrency, blockchain, and tokenization, you will see the potential and real significance of an SEC Jurisdiction over competitors. Overman said:

"Digital assets will fundamentally change financial markets. Once cryptocurrencies such as bitcoin become easier to buy and store, we will see strong growth momentum."