Frankfurt The German savings banks are joining the crypto boom. They are considering enabling their customers to trade cryptocurrencies. “The interest in crypto assets is enormous, the Sparkassen-Finanzgruppe also sees it,” the German Giro and Savings Bank Association (DSGV) announced on request.
At S-Payment, a Sparkasse subsidiary, “a project is being conducted to determine which possibilities and risks a wallet offers in which Sparkasse customers can safely store crypto assets”. The subsidiary, which belongs to the regional savings bank associations and the Landesbanken, is currently responsible for part of the savings banks’ payment transactions.
First, the industry newsletters “Finanz-Szene” and “Finance Forward” reported together on the ideas of the savings banks. According to this, customers should be able to control digital currencies directly via the checking account, so that they do not have to use a crypto exchange – such as Coinbase – or any other special provider of digital currencies.
The savings banks are market leaders in business with private customers and have more than 35 million private checking accounts, but not all customers access online banking or smartphone apps. It should be important for the savings banks to make an offer themselves when it comes to crypto investments. The neo and digital brokers are particularly benefiting from the current boom in stocks. Most of the new securities accounts are opened here.
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It will be a few months before the 370 savings banks are able to offer a corresponding product. “The project team will prepare decisions in the committees of the Sparkassen-Finanzgruppe in the first half of 2022,” the DSGV continued. The lobby association itself is skeptical of the project, as he emphasized.
Investment with high risks
The savings banks still have to clarify a few important points. So far it is not known which requirements customers have to meet in order to be able to invest directly in crypto currencies. In the case of equity investments, for example, credit institutions must clarify the risk tolerance required for this with customers in advance. It would be obvious that they are activated for the use of the crypto wallet.
Investments in cryptocurrencies are highly speculative. Bitcoin in particular, the best-known crypto currency, fluctuates violently again and again. Only on the weekend before last, among other things, the Bitcoin slipped by 20 percent within 24 hours.
The German financial regulator Bafin warned against investments in crypto currencies at the beginning of the year, referring not only to direct acquisition, but also to derivatives that track the price development of these currencies. “With all of these systems, consumers can suffer significant capital losses. A total loss is also possible, ”wrote the authority.
For German private investors interested in crypto currencies, there are already new offers constantly. Since the summer the central online broker of the savings banks, the “S Broker”, has enabled its customers to make indirect investments in crypto currencies and blockchain technology. Investors can choose from around 40 certificates, ETFs and individual stocks in order to benefit from developments relating to blockchain technology.
Other market participants welcome the project, including crypto expert Julian Grigo, Managing Director at Solarisbank, whose customers also include companies in the crypto world. “Cryptocurrencies are now an established asset class. If banks want to get a piece of the pie, they have to join in, ”he says.
In his view, the savings banks’ project, if successful, could change the market. Because it puts “other banks in the market under pressure to follow suit in the crypto sector.”
However, Grigo does not see the savings banks’ offerings as competition, as the market will continue to grow anyway. Instead, he sees it as a good sign for the crypto world: “We welcome the fact that even more people are gaining access to crypto currencies.”
Cooperative banks are also venturing into the crypto world
The cooperative banks now also have corresponding ideas. Some banks, including DZ Privatbank, have been considering entering into the offer of crypto currencies for private customers for a long time, but have so far failed to take public steps. Other credit unions are already further along. The GLS community bank from Bochum is pursuing perhaps the most far-reaching approach.
According to several insiders, the house, which specializes in sustainable financial products, is planning to set up a tokenization platform. This could enable institutional GLS customers, such as companies and associations, to issue their own crypto tokens, for example for project financing.
A team in Bochum has been working on the topic for over a year. A decision should be made as soon as possible as to whether GLS is building its platform alone or with a partner.
“Our focus is currently on tokenizing securities and then also keeping them in a wallet,” said a GLS spokesman when asked by the Handelsblatt. This comprehensive solution is “a little more complex” in development.
A first example project should be “digitally drawable” as early as the beginning of 2022, the spokesman continued. “In the next step, we will tokenize this and make it safe for us in a wallet. This means that the customer no longer needs a depot and the technical infrastructure becomes cheaper in the medium term. ”
In the coming year, GLS also wants to examine further possible uses in order to provide customers with “simple, secure and inexpensive access” to sustainable crypto investments. In doing so, keep an eye on the high power consumption of Bitcoin and Co.: “We will also always use digital offers with our strict sustainability criteria and real economic references,” emphasizes the bank.
More: Coinbase Germany boss: “We will see more institutional business in the crypto sector”