Due to the clarity provided by the EU's implementation of the Markets in Crypto-Assets (MiCA) laws, several of the biggest banks in the EU are considering entering the cryptocurrency space.
The deputy CEO of Bitpanda, Lukas Enzersdorfer-Konrad, stated as follows:
"European banks are embracing tokenization technology and cryptocurrencies as an asset class because MiCA, the upcoming regulatory framework for Europe, is providing full clarity for banks all of a sudden."
The European Council passed the first all-encompassing set of laws governing the cryptocurrency sector in May 2023. Through stricter anti-money laundering (AML) regulations and transparency standards, the MiCA framework seeks to safeguard investors.
European banks are more confident in creating cryptocurrency services now that regulations are clear for the first time. However, they still lack the infrastructure and technological know-how, so they are turning to companies like Bitpanda that offer cryptocurrency services. By Enzersdorfer-Konrad's account:
"Banks are realizing all of a sudden that they lack the internal technical expertise and knowledge that they need to enter the market because they did not have the time or resources to build it up."
While other big banks are trying to create corporate crypto services, Raiffeisen, the largest community banking company in Austria, has collaborated with Bitpanda to offer digital asset services to retail banking customers.
In addition to the MiCA bill, Enzersdorfer-Konrad said that institutional interest has been strongly stimulated by the US government's approval of the first spot Bitcoin exchange-traded funds (ETFs), which has been mirrored by the largest European banks.
"It is evident that banks of all sizes in Europe, ranging from tier one to tier three, are searching for [crypto service] providers and examples of how to get started."
The Landesbank Baden-Württemberg (LBBW), the biggest federal bank in Germany, declared last week that it will begin providing institutional clients with crypto custody services in the second half of the year. The bank is offering custodial services by utilizing Bitpanda's infrastructure.
The deputy CEO of Bitpanda claims that several of the biggest companies in Germany, who are clients of LBBW, were already storing cryptocurrency assets prior to the bank's investigation into custodial options.
"[LBBW] discovered that their corporate customers already have a partial cryptocurrency and Bitcoin holding on their balance sheet after speaking with the relationship managers."
Since the public already trusts financial institutions to retain its fiat money and precious metals, banks like LBBW are shifting towards offering crypto custody solutions in response to growing business interest, according to Enzersdorfer-Konrad.
April 2024, Cryptoniteuae