By Shelly Melancon (Switzerland)
German magazine says Sparkasse clients could get the ability to gain direct exposure to cryptocurrencies like Bitcoin and Ethereum. A small-scale implementation will help build the infrastructure to deliver the service at scale. The German savings banks hope to start the service early next year. According to reports, technology experts S-payment have committed a team to help the bank develop the framework.
The Road Map
Available information shows that before the bank can launch the project, each member branch still has to vote on it. A positive vote for the project, they say, will see the project undertaken within the year. The which had previously been kept under wraps would be a big move for the banking sector in Europe.
Sparkasse has a customer base as large as 50 million. The large customer base makes them leaders in the German financial market. The move will likely be a catalyst for the mainstream trading of cryptocurrencies in Europe. Other banks at this level have remained unwilling to engage this sector so directly. Sparkasse intends to allow its clients to purchase cryptocurrencies straight from their bank accounts. The banks are hoping that their reputation will dispel any possible reservations.
Each of the bank’s nearly 400 branches runs small-scale tests to help them decide for or against the project. The tests must be conducted independently because of the regional nature of Europe. Available information shows the banks are already leaning towards the idea.
Also read:Perceived Necessity
A bank representative disclosed that the bank couldn’t look away from the market at its current growth level. The consumer demand for the product makes it necessary for the savings bank to look into the emerging market. He disclosed that a survey revealed that at least 10% of their client base is open to having cryptocurrency holdings.
A Crypto Loving Government
The German government will likely support the proposed project. Germany has remained one of the most welcoming of cryptocurrencies in Europe. The regulatory authorities have approved many cryptocurrency-related products this year.
Notably, in the summer of this year, the country’s number one regulator approved Coinbase’s Custody in Germany. It was the first cryptocurrency custody authorized in the country, making it a breakthrough of sorts for the emerging market in Germany. The approval of the Federal Financial Supervisory Authority became necessary after legislation in 2019 made it essential for crypto businesses running in the country to do so.
Two weeks ago, the German stock market operators listed Invesco’s new crypto exchange product. The wealth managers had just failed to launch an exchange-traded fund backed by Bitcoin futures in the United States. However, the fund managers had a better turn of fortunes in Germany as the company’s spot Bitcoin exchange-traded product got approved.
About the same period that Invesco got its listing, a statement from the new German administration disclosed that they are interested in creating an environment that allows both traditional finance and blockchain to grow. The report further explained the administration’s interest in developing regulatory frameworks that suit the advancements in the blockchain. They aim to minimize the risks with just the right amount of supervision.
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