Europe’s largest banks are moving into crypto thanks to regulations: Bitpanda

EU’s major banks are considering joining the cryptocurrency sector due to the clear guidelines provided by the MiCA regulations adopted by the European Union.

This is according to Lukas Enzersdorfer-Konrad, the deputy CEO of Bitpanda, who told CryptoMoon:

“European banks are moving into crypto as an asset class and tokenization technology, because MiCA, the upcoming regulatory framework for Europe is suddenly bringing full clarity for banks.”

In May 2023, the European Council introduced the MiCA framework as the initial comprehensive law for the cryptocurrency sector. This regulation intends to safeguard investors by enforcing stricter transparency requirements and strengthening Anti-Money Laundering (AML) measures.

Due to the newfound regulatory certainty, European banks are now more assured in offering crypto services. However, they encounter challenges in terms of the necessary technical expertise and infrastructure. As a result, they are collaborating with crypto service providers like Bitpanda to overcome these hurdles. (Enzersdorfer-Konrad adds:)

“Suddenly [banks] are realizing that they do not have the technical expertise, the knowledge internally because they didn’t have time and investment to build it up, but suddenly they want something to go to market with.”

Raifeissen, Austria’s largest community bank, collaborates with Bitpanda to provide digital asset solutions for its retail banking clients. Meanwhile, other significant banks focus on creating crypto services for corporations.

According to Enzersdorfer-Konrad, the US approval of the first Bitcoin spot ETFs has significantly fueled institutional investment in addition to the MiCA bill, evident among major European banking institutions.

“Across all Europe, all sizes of banks, from tier one to tier three, are clearly looking for [crypto service] providers and use cases about how to start.”

In the past week, the largest federal bank of Germany, Landesbank Baden-Württemberg (LBBW), revealed its intention to initiate crypto custody services for institutional clients come the second half of the year. The bank intends to utilize Bitpanda’s infrastructure to deliver these custodial services.

Large German corporations that are clients of LBBW had previously invested in cryptocurrencies even before the bank began considering custody services, as revealed by Bitpanda’s deputy CEO.

“In discussions with the relationship managers, [LBBW] realized that their corporate customers already partially hold crypto and Bitcoin on their balance sheet.”

As the demand from corporations grows, banks such as LBBW are shifting their focus to provide crypto custody services. This is because people have placed faith in financial institutions to safeguard their traditional currency and valuable metals, according to Enzersdorfer-Konrad’s explanation.

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2024-04-23 14:06