European Banks Enter Crypto Market, Driven by MiCA Regulations & Institutional Interest
Summary:
EU's major banks are planning to venture into the cryptocurrency sector, spurred by the clear regulatory framework offered by the Markets in Crypto-Assets (MiCA) regulations. With increasing institutional interest, banks lack the technical expertise and infrastructure, leading to collaborations with cryptocurrency service providers such as Bitpanda. Banks like Austria's Raiffeisen and Germany's Landesbank Baden-Württemberg (LBBW) are exploring or offering digital asset services. The trend is also fueled by the approval of the first spot Bitcoin ETFs in the U.S.
Major European Union banks are preparing to delve into the cryptocurrency sector, supported by the clarity brought by the EU's adoption of the Markets in Crypto-Assets (MiCA) regulations. This information comes from the deputy CEO of Bitpanda, Lukas Enzersdorfer-Konrad, who stated in an interview with CoinTelegraph that European banks are exploring cryptocurrency as an asset class and tokenization technology, thanks to the MiCA, which is providing a clear regulatory framework.
The European Council endorsed the first comprehensive legal framework for the cryptocurrency market in May 2023, with the aim of shielding investors through robust transparency standards and Anti-Money Laundering regulations. This regulatory clarity has boosted the confidence of European banks in creating cryptocurrency services. However, they are hindered by a lack of technical knowledge and infrastructure, leading them to seek support from cryptocurrency service providers such as Bitpanda.
Enzersdorfer-Konrad comments, "They suddenly realize they don't have the necessary technical skills and knowledge since they did not invest time in building it. But now, they want a ready product to introduce to the market." For instance, Raiffeisen, Austria's largest community banking group, has joined forces with Bitpanda to provide digital assets services to its retail banking consumers. Other notable banks are aiming to create corporate cryptocurrency services.
Alongside the MiCA legislation, the approval of the first spot Bitcoin ETFs in the U.S. has acted as a major propellant for institutional interest, a trend mirrored by Europe's largest banks, says Enzersdorfer-Konrad.
The deputy CEO of Bitpanda notes, "Banks of all sizes across Europe are in search of crypto service providers and are exploring ways to get things started." Last week, the Landesbank Baden-Württemberg (LBBW), Germany's biggest federal bank, revealed its plans to offer crypto custody services to institutional customers starting in the latter half of this year, using Bitpanda’s infrastructure.
Enzersdorfer-Konrad pointed out that several of LBBW's largest corporate clients had already held crypto assets before the bank began seeking out custodial solutions. As corporate interest increases, banks such as LBBW are trending towards offering crypto custody services, since the public already has faith in these institutions in terms of securing their traditional money and valuable metals.
Published At
4/23/2024 1:58:11 PM
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