Cryptocurrencies are still on the rise. LBBW has teamed up with the crypto platform Bitpanda. This should make it easier for customers to obtain crypto coins.
Stuttgart – “Bitcoin is becoming acceptable,” it was said after the US Securities and Exchange Commission (SEC) paved the way for exchange-traded Bitcoin ETFs. After spending years as something of a niche topic, cryptocurrencies are now receiving increased attention from traditional institutions. This includes the Landesbank Baden-Württemberg (LBBW): It is now cooperating with Europe's leading crypto platform.
Bitcoin cooperation – LBBW teams up with Bitpanda
Specifically, this is a “strategic partnership” that LBBW has entered into with Bitpanda. As part of this, LBBW receives access to an “Investing-as-a-Service” infrastructure, which, among other things, is intended to enable the custody of cryptocurrencies (including Bitcoin, Ethereum and many more). Other digital assets are also included.
“By storing crypto assets, we are positioning ourselves with clear added value for our corporate customers – while ensuring the highest security standards,” said Stefanie Münz, member of the LBBW Board of Directors responsible for finance, strategy and operations, in a company announcement. Bitpanda provides the “technically and regulatory necessary” infrastructure to offer customers appropriately secure solutions in the area of digital assets.
Cryptocurrencies on the rise – “Market for digital investment products is developing”
According to LBBW, there are more and more German companies that own or trade crypto assets. The safekeeping of these assets as basic infrastructure is therefore taking on an increasingly important role. LBBW and Bitpanda now want to work together to provide LBBW's corporate customers with a regulated platform in the coming months so that they can store their cryptocurrencies - or procure new ones.
“The market for digital investment products is constantly developing. We therefore see it as necessary to further promote this innovative topic as a regulated state bank in the German market,” added Stephan Paxmann, responsible for digitalization and innovation at LBBW. Together with Bitpanda, LBBW wants to offer custody of cryptocurrencies for corporate customers. The market launch is scheduled to take place in the second half of 2024. In the long term, Bitpanda should take on the role of a technology supplier.
Bitpanda operates one of the “safest and most regulated” crypto platforms in the industry, LBBW found. Over four million users access the fintech’s services. Within the EU, Bitpanda is considered the leading platform for digital assets.
An accolade for Bitcoin – SEC allows stock exchange trading
Before LBBW, several other German banks had already ventured into the crypto sector. Commerzbank, for example, had already received a custody license from the financial regulator BaFin in 2023. According to the
Handelsblatt
, however, this only included
the storage of crypto assets. The same with Deutsche Bank, which had also applied for a custody license. With the step of enabling custody and procurement at the same time, LBBW is an industry pioneer among the major banks - however, it does not have a custody license and is therefore dependent on Bitpanda. DZ-Bank also wants to enable its private customers to trade cryptocurrencies in 2024.
Cryptocurrencies are currently making their way through institutions. It was only in January that the US Securities and Exchange Commission gave the green light for trading Bitcoin ETFs. Investors had been speculating on this since last October, and as a result the Bitcoin price rose sharply. Experts interpreted the decision as an accolade for Bitcoin. The approval sent a great signal, wrote the German Press Agency, citing Philipp Sandner from the Frankfurt School of Finance and Management. “Bitcoin is now slowly entering the mainstream; he becomes acceptable.”
Despite everything, cryptocurrencies like Bitcoin have their critics. Stiftung Warentest, for example, initially advised against investing in cryptocurrencies. According to a report, Bitcoin and Co. cannot offer investors the reliability they actually need in times of high inflation.
The same applies to (co-)ownership of assets such as wind farms, shipping containers or media funds. The risks are difficult to calculate and returns are not certain.