The banking giant recruited the technology division of crypto exchange Bitpanda to help develop the offering, Bloomberg reported Tuesday (July 1), citing unnamed sources.
Deutsche Bank’s corporate bank, which first announced its custody plans in 2022, will also continue to work with Swiss tech company Taurus on the service, the report said.
The custody project is happening as big banks are upping their focus on digital assets, bolstered by new European regulations and a more pro-crypto environment in the United States, according to the report.
Last month, Deutsche Bank was considering expanding its efforts in the digital asset industry amid this new regulatory landscape. The expansion could include issuing an in-house stablecoin or joining a larger project, as well as a tokenized deposit solution.
“We can certainly see the momentum of stablecoins along with a regulatory supportive environment, especially in the U.S.,” said Sabih Behzad, Deutsche Bank’s head of digital assets and currencies transformation, per Bloomberg. “Banks have a wide variety of options available to engage in the stablecoin industry — everything from acting as a reserve manager, through to issuing their own stablecoin, either alone or in a consortium.”
PYMNTS wrote in May about big banks’ entry into the stablecoin space following the news that J.P. Morgan Chase, Bank of America, Wells Fargo and Citigroup were exploring the launch of a jointly operated digital dollar.
“The timing of this venture is no coincidence,” PYMNTS wrote May 23. “For years, stablecoins, which are digital tokens pegged to traditional currencies like the U.S. dollar, have promised to blend … the efficiency of blockchain transactions and the stability of fiat currency.”
The banks’ efforts here mark a departure from the early crypto ethos of disrupting incumbent players in the financial system. Rather, it’s a bet that those incumbents are best suited to bring digital dollars into the mainstream.
“When you think about the needs of every FinTech or payments company, or a bank that wants to enter the [stablecoin] space, they need secure infrastructure, from the creation of assets, such as tokenizing them, to holding them, and of course moving them,” Utila co-founder and CEO Bentzi Rabi said in an interview in March.
“Everyone will enter the stablecoin era in the end,” Rabi added.
