Germany’s Deutsche Bank plans to launch a digital asset custody service for institutional and corporate clients in Europe, with initial client onboarding scheduled for 2026. The service would give eligible clients regulated access to digital asset custody without requiring them to build and maintain their own custody infrastructure.

The bank is developing the service for the secure and regulated custody of digital assets. Its launch timeline depends on the completion of required regulatory procedures.

Availability by geography, the range of supported assets and the scope of the service may change based on regulatory requirements, the bank’s internal approvals and client demand.

Clients will be able to store digital assets and transfer them to third parties. Deutsche Bank will manage wallets and private keys on their behalf.

“Digital assets are not a replacement for the traditional financial system, but an important complement to it,” said Gerald Podobnik, co-head of Corporate Bank at Deutsche Bank.

Podobnik said the bank aims to provide clients with regulated access to the digital asset market. Further development of the service will depend on client demand, regulatory requirements and Deutsche Bank’s risk appetite, he said.

Initial asset support

At launch, the service will support a limited selection of assets, including bitcoin and Ethereum, as well as selected stablecoins and e-money tokens. Deutsche Bank plans to support USDC, EURC and EURAU.

The bank may expand the list based on client demand, internal product approvals, risk management and regulatory processes. Its project roadmap also includes tokenized financial instruments.

Operational and security controls

Deutsche Bank said it designed the solution around corporate governance procedures and multiple layers of operational controls. Planned measures include secure key generation, hardware-based key protection, segregation of employee duties, multi-level approval procedures and separate environments for hot and cold storage.

The bank also plans to use backup technical infrastructure and controlled backup and recovery mechanisms. Deutsche Bank expects to engage third-party technology and infrastructure providers for certain technical components.

The initial client base will comprise customers of Deutsche Bank’s Corporate Bank and Investment Bank, including corporations, asset managers, hedge funds, custodians, brokers and sovereign institutions.

The bank will onboard clients in accordance with its eligibility criteria, customer due diligence procedures and risk assessments.

Deutsche Bank also cited risks associated with digital assets, including price volatility, fraud, cyber incidents and potential disruptions involving market participants. Crypto assets are not covered by a deposit guarantee scheme comparable to the protection available for bank deposits.

The U.S. Securities and Exchange Commission previously prepared a proposal on rules for the custodial storage of crypto assets.

Source: Incrypted