The German stock exchange Boerse Stuttgart will provide electronic depository services to institutional investors
Since the new German cryptocurrency regulation came into effect, financial institutions in Germany have been preparing to provide cryptocurrency custody services. Among them is Boerse Stuttgart, the country’s second-largest stock exchange. Having obtained a temporary license from BaFin, the regulatory body in charge of licensing for cryptocurrency service providers, Boerse Stuttgart is preparing to provide cryptocurrency custody services to institutional investors.
Boerse Stuttgart: The new German cryptocurrency regulation is poised to attract institutional investors
Blocknox’s cryptocurrency custody service was established in late January 2019 for users of BISON, a cryptocurrency exchange application provided by Boerse Stuttgart. While the exchange was launched in September, it was open to all merchants across the country in December. Boerse Stuttgart also announced in December that it was partnering with large financial services groups. Japan SBI Holdings to expand the cryptocurrency business of both companies in Asia and Europe.
On Tuesday, Boerse Stuttgart announced that its cryptocurrency custody department was preparing to provide custody services to institutional clients. Such as fintech companies, banks, and asset managers. Accordingly, Blocknox, a subsidiary of Boerse Stuttgart Digital Ventures, is in charge of depositing cryptocurrencies on a margin basis.
Regarding the new legal regulation on cryptocurrency custody in Germany as of January 1, 2020, Blocknox has announced its intention to the regulators to obtain the necessary licenses.
Blocknox Managing Director Ulli Spankowski explained:
“We welcome the regulation of cryptocurrency custody as a logical step towards further professionalization of the industry. Thanks to the new law, many institutional players can participate in the cryptocurrency market.”
Ulli Spankowski, Blocknox Managing Director
New German cryptocurrency regulation
The law enforcing the amendment of the fourth EU Money Laundering Directive came into effect in Germany on January 1. It requires financial institutions wishing to provide cryptocurrency depository services to obtain authorization from the Federal Financial Supervisory Authority (BaFin).
The regulator explained that financial institutions that have active cryptocurrency custody operations when the new law goes into effect must file in writing by March 31. This shows users interest to provide cryptocurrency services if they want to continue offering cryptocurrency custody. Banks without existing cryptocurrency custody business when the new law goes into effect cannot start providing services until they have received approval from BaFin. According to the report, more than 40 financial institutions submitted this intention.
Blocknox will submit its final application by the deadline. BaFin has confirmed that banks that do not submit expressions of interest before March 31 must stop providing their current cryptocurrency custody services. Financial institutions that have submitted an expression of interest must complete an application by November 30 or stop cryptocurrency services before that date. BaFin also noted that the time required for licensing depends on the case. The regulator is still finalizing its administrative practice for the ongoing approval and oversight of new cryptocurrency services.
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