Crypto Custodians in Germany are required to adhere to the law that will come into effect on Jan 1st. Custodians that serve German clients are required to procure license and to be licensed the custodians are required to describe the intention to get a license, with BaFin before April 1st and submit an application before Nov 1st.
Until the effect of the new regulation, as per BaFin, custodians will be allowed to work if the letter of intent to procure license has been submitted.
The law is an updated version of the existing banking regulations. The custodian service offering companies, once licensed, will be recognised as the German financial institutions, but not classified as banks in Germany.
Ulli Spankowski, chief digital officer and managing director of the crypto custody subsidiary of German stock exchange Boerse Stuttgart, called Blocknox, sees the license as a step forward for “the professionalism of the industry.” The subsidiary has already advised BaFin that it plans to apply.
Hildebrandt predicts the costs of licensing will be similar to other German financial services licenses where firms will need two managing directors, an established German entity and 125,000 euros of starting capital. He also estimates installation will cost 250,000 to 350,000 euros and recurring yearly costs will be 350,000 euros.
