Deutsche Bank and Morgan Stanley launch crypto offensive
The growth of the token economy is sparking desire among financial services firms. Two more heavyweights, Deutsche Bank and Morgan Stanley, are registering interest in the digital asset infrastructure.
Crypto custody business has been included in the German Banking Act for about a year. But although the management of crypto assets has been cast in regulatory form as a Bitcoin Lifestyle review financial service, major banks have so far exercised restraint. They have left the pioneering work to small, innovative banking houses. However, the increasing customer demand for digital assets is gradually luring „giants“ like Deutsche Bank out of their shells.
According to a crypto report published in December by the World Economic Forum, Deutsche Bank is developing a platform for the safekeeping of digital assets. According to the report, the focus would be on „a fully integrated custody platform for institutional clients and their digital assets, offering seamless connectivity to the broader cryptocurrency ecosystem“. The focus of this all-in-one platform is on a „bridge between digital assets and traditional banking services“, digital asset management and custody in the form of an „institutional hot/cold storage solution“.
Deutsche Bank has already completed a proof of concept and plans to gradually roll out the platform over the course of 2021, starting with a custody service for institutional investors. Subsequently, clients will also have the opportunity to buy and sell digital assets via partnerships with brokers, issuers and exchanges.
The ultimate goal would be an open banking platform „that enables onboarding of third-party providers“ and integrates services such as lending and staking. The service embeds itself in a framework of fully regulated banking services, including KYC procedures and AML guidelines. This could establish the platform as a door opener to the token economy, especially for professional investors.
Morgan Stanley plans crypto offensive
On the other side of the pond, crypto statements from major financial services providers are also getting louder. After the Bank of New York Mellon and MasterCard announced the integration of crypto services only a few days ago, another financial giant, Counterpoint Global, is venturing into the crypto economy, according to Bloomberg. According to the report, the „150 billion US dollar investment arm of Morgan Stanley“ is currently investigating whether „cryptocurrencies would be a suitable option for its investors“.
Given the growing interest of institutional clients in custody solutions for digital assets, the move would not come as a surprise. Companies such as MicroStrategy and, most recently, Tesla, show that demand is growing on the part of established companies. As traditional financial services providers have so far been observing the development of the token economy from an observer role, asset managers such as Grayscale are still catching up with this demand. According to Bloomberg, banking giants such as Morgan Stanley are therefore gradually under pressure not to miss this turnaround.
Even institutional investors, who are prevented by the rules of their funds from holding Bitcoin directly, have turned to such trusts. For Wall Street firms, the inability to offer Bitcoin to these clients increases the risk of losing them to other managers.
Bloomberg cites anonymous sources close to the banking giant. Morgan Stanley has yet to comment.