Germany has officially entered a recession after two consecutive quarters of negative growth. The country was particularly affected after the Russo-Ukrainian conflict, due to its dependence on Russian energy. However, according to the report, German banks are now comfortable with cryptocurrencies.
However, in-person cryptocurrency trading is not allowed at German bank branches. Even the largest financial institutions, such as Comdirect, Deutsche Kreditbank or ING, prohibit their customers from trading cryptocurrencies through brokers. Customers of these banks can only invest in cryptocurrencies through certificates that are exact copies of those currencies.
However, the reluctance of German banks to accept cryptocurrencies is fading. Many organizations are developing strategies to allow customers access to cryptocurrencies.
With the introduction of the wpNex crypto trading platform in March 2023, Deutsche WertpapierServiceBank (Dwpbank) has made a significant step forward. With this change, 1,200 banks and thrifts in Germany now have access to the digital asset market. But it is unclear how the affiliated banks will react to the offering and whether it will live up to expectations.
For its large institutional clients, Deutsche Bank focuses on crypto custody solutions. This means that in the future, mutual funds or pension funds will be able to keep their cryptocurrencies at Deutsche Bank. However, the bank will not be offering any crypto-related goods or services to corporate or private customers anytime soon.
With the country entering a recession, whether banks want to invest in risky assets like cryptocurrencies is in question. It is possible that the country wants to be prepared for the future and is therefore taking steps to ease the transition to crypto investments.
However, how institutional players react to the development is yet to be seen. Given the economic environment, it is possible that Germany will see slower adoption of digital assets.
However, the popularity of digital assets cannot be denied. Furthermore, as customer demand grows, German banks may soon start offering cryptocurrency services to retail customers as well.