Germany’s Crypto Custody Law Hits a Snag: Startups Can’t Get Bank Accounts

While more than 40 banks have reportedly expressed interest in Germany’s new crypto custody license, those firms may still have to put up with an anti-crypto sentiment among German banks.

“If you try to open a bank account for a company that is in the space, you are working with the institutional banking arm of that bank,” said Stijn Vander Straeten, CEO of Crypto Storage AG.

German bankers are risk-averse, and crypto companies aren’t making them money by asking for checking accounts.

In November, Switzerland-based Crypto Storage AG, a subsidiary of Crypto Finance AG, opened a German branch in downtown Frankfurt called Crypto Storage Deutschland GMBH so it could be eligible to apply for the license. Around 15 banks turned down Crypto Storage Deutschland before it found its current bank, Straeten said. The bank that eventually accepted Crypto Storage as a customer had to first be convinced to take on the account by Sven Hildebrandt, head of the consulting firm DLC.

“We get calls from different [crypto] companies that want to go to the German market and get regulated. Many of them have this problem,” said Matthias Winter, partner at Eversheds Sutherland Germany, a firm working directly with German regulators on how the law should be enforced. “There is no legal reason why banks wouldn’t offer bank accounts but they are hesitant because they don’t understand the business.”

While many banks with custody services in Germany have talked about the law in the German press, the only banks that have announced an intention to apply for the law have been tech-focused service providers like solarisBank, which opened a digital assets unit in December 2019 in anticipation of the law passing.

In a report that came out at the beginning of the year, BNP Paribas Securities Services Head of Germany and Austria Thorsten Gommel said he wanted the bank to continue to lead on custody, including custody of digital assets.

When CoinDesk reached out to BNP Paribas,…

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