The interest of German banks in offering cryptocurrency trading to clients appears limited, as BaFin has granted them only four licenses to custody digital assets. This was stated by Mark Branson, the regulator’s president.
Another fourteen financial institutions, including Commerzbank, have temporary permission to provide custodial services for cryptocurrencies.
According to the head of BaFin, blockchain technologies must stop being merely ‘promising’ and should become ‘efficient and scalable’.
“Not all business models [in the industry] are serious. Waves of innovation, as we know, also bring freeloaders and scammers,” Branson added.
In his words, some cryptocurrencies carry significant investment risks.
“At present they do not pose a threat to financial stability. However, events may unfold in such a way that momentum reverses toward growth of the market [digital assets], and then their interconnection with traditional finance will strengthen,” Branson said.
Regarding regulation, he noted that a flexible and balanced policy is needed—overly strict rules should not stifle innovation.
“That is exactly the approach BaFin is taking,” Branson stressed.
In November, the regulator issued a directive to remedy deficiencies in the operations of Coinbase’s licensed subsidiary.
Follow ForkLog’s bitcoin news on our Telegram — cryptocurrency news, prices and analytics.