Traditional Banking Giants Make Crypto Moves

by Kelvin Maore

  • BlackRock and Deutsche Bank amplify institutional interest in cryptocurrencies.
  • Bitcoin value rebounds, driven by increasing institutional investments.
  • Traditional finance is progressively embracing digital asset strategies.

According to reports, just five years ago, BlackRock CEO Larry Fink was dismissive about the prospect of cryptocurrency investment. In a dramatic turn of events, the world’s largest asset manager now acknowledges the rising appeal of digital currencies.

In 2018, Fink claimed his clients had ‘zero interest’ in cryptocurrencies. He even went so far as to suggest that one of crypto’s primary uses was money laundering. Fast forward to 2023, and it seems Fink’s stance has considerably softened. BlackRock, best known for creating, managing, and distributing funds, has recently filed for a local Bitcoin ETF in the US.

Interestingly, BlackRock is no stranger to the crypto universe. Per reports, they had teamed up with Coinbase, a top-tier cryptocurrency exchange, just last year. The news added that Coinbase is set to act as a Bitcoin custodian for the iShares Bitcoin Trust if regulatory approval comes through.

Bitcoin Rebounds as BlackRock and Deutsche Bank Show Interest

Additionally, BlackRock is now working on partnerships with Coinbase and Circle, a digital currency platform. The firm’s crypto strategy focuses on four key aspects: stablecoins, tokenization, permissioned blockchains, and crypto assets.

Significantly, Bitcoin (BTC), the world’s largest cryptocurrency by market capitalization, recently hit the $30K mark for the second time this year. This development coincided with BlackRock’s filing for Bitcoin ETF applications. Bitcoin’s comeback has also been energized by the news from the EDX cryptocurrency exchange that they will list four tokens – Bitcoin, Ethereum, Bitcoin Cash, and Litecoin – in the United States. 

However, it’s not just BlackRock showing enthusiasm for digital currencies. The crypto fever seems to be spreading across traditional finance. Deutsche Bank, Germany’s leading financial provider, has also applied for a digital asset custody license in Germany, further legitimizing the crypto market.

Consequently, the bank’s application to Germany’s regulatory body, Bafin, seeks permission to operate a custody service for digital assets, including cryptocurrencies. David Lynne, who currently heads the commercial banking unit, unveiled this exciting development recently.

Besides, Lynne, who took over the helm a year ago, has propelled the bank towards digital assets. This move aligns seamlessly with Deutsche Bank’s broader strategic plan to bolster its corporate banking sector fee income.

Hence, it is clear that as we move into the second half of 2023, traditional finance is increasingly embracing digital currencies. Fink’s changing stance, BlackRock’s ETF application, and Deutsche Bank’s foray into digital asset custody signal a growing institutional interest in cryptocurrency. It will be intriguing to see how these developments shape the future of finance.