Deutsche Bank is weeks from holding bitcoin

Deutsche Bank is weeks away from launching its first digital asset service, a crypto custody offering in Germany, Reuters reported on Friday. Gerald Podobnik, co-head of the corporate bank, told Reuters on the sidelines of the IMF and World Bank meetings in Bangkok that after the German launch the bank plans to extend the custody platform to Asian financial centres next year. Reuters described Deutsche Bank as Germany's biggest lender and Podobnik as a 23-year veteran of the bank.

The service itself is not new. Deutsche Bank announced it on 16 September in a release that said it would go live with first clients "this year", subject to the completion of the applicable regulatory timeline. The release said the service is for institutional and corporate clients in Europe, and that the bank will manage wallets and private keys on their behalf so that clients need not build their own custody systems. Friday's interview adds a timetable of weeks and a plan for Asia.

The two accounts of what comes first differ in emphasis. The bank's release says that at launch it will support bitcoin and ether "as well as selected stable coins or e-money tokens, including USDC and EURC, EURAU", with tokenised financial instruments on the roadmap. Reuters described a phased rollout that starts with custody of major cryptocurrencies such as bitcoin and ether and then expands to services that help clients move money into and out of mainstream stablecoins. Holding a stablecoin and converting money into and out of one are different services, so both can be true; the bank has not set out the sequence in more detail.

Podobnik described the products as additions. "I believe that, as the financial system, we will need to offer tokenised or blockchain solutions to our clients as additional services alongside our traditional ones ... but not necessarily to replace what we are doing today," he told Reuters. In the September release he said: "Digital assets are not a replacement for the traditional financial system but an important complement to it." He also cited the hundreds of billions of dollars held in stablecoins as evidence of new pools of value; the figure is his description, not a precise number.

Reuters said the bank also plans tokenised deposits and help for clients issuing blockchain-based securities such as digital bonds. The custody push forms part of a strategy to reach compound annual growth of 8 per cent in corporate banking by 2028, Podobnik said. The initial client group, according to the release, comprises clients of the Corporate Bank and Investment Bank, including corporates, asset managers, hedge funds, custodians, brokers and sovereign institutions.

Custody at a bank is largely a matter of controls, and the release lists them: secure key generation with hardware-based protection, segregation of duties, multi-person approvals, separate warm and cold storage, a redundant technical setup and backup and recovery arrangements. It says selected external technology providers will supply defined technical components, without naming them. The bank also states that the service is not for retail clients and that crypto-assets are not covered by a deposit-guarantee scheme comparable to the one for eligible bank deposits.

What remains open is the date, the first clients and the price. Reuters did not report any of them, and the release says the timing, geographical availability, supported assets and scope may change as a result of regulatory requirements, internal approvals, market developments or client demand. Until the service goes live, "weeks away" is the bank's description of its own plan.

Banks entering custody have been one of the pressures on fees, as described in our reporting on the custody price war. The euro e-money tokens on the bank's launch list sit inside the regime described in One of forty-five, and the first to be significant, and payments firms are building accounts that hold both kinds of money, as in Mastercard's first BVNK product. A large German bank holding the keys is the next step in that sequence.