Deutsche Bank Announces Investments in Two Crypto Firms as More TradFi Institutions Join the Race

• The bank is planning to acquire a minority stake in Deutsche Digital Assets and Tradias.
• Deutsche believes that there are opportunities in the current bear market.

The German multinational investment bank Deutsche is planning to invest in two cryptocurrency companies as part of its expansion plans, according to sources that shared the information with Bloomberg.

Stefan Hoops, the CEO of the bank’s investment division, DWS Group, is reportedly holding talks to acquire a minority stake in Deutsche Digital Assets, an exchange-traded products service provider, and TradFis, one of the top trading firms affiliated with Bankhaus Scheich. 

In a statement by Hoops last week during an investors’ meeting, the executive said that the relatively low prices in the value of most cryptocurrencies present a strategic investment opportunity for the bank. The executive also said in a roadmap released in December that one of the bank’s objectives was to launch its services on a blockchain.

Green-washing allegations

Last year, DWS Group came under the limelight when police officers raided its premises in Frankfurt over alleged green-washing – where companies provide misleading information about the environmental impact of their products. The group declined the accusations.

Since then, DWS has been attempting to salvage its reputation, reportedly making strategic investments and efforts to be on good terms with the regulators, especially those in the digital asset space. Germany is regarded as one of the most crypto-friendly countries, charging zero capital gains tax on the sale of digital assets held for more than a year. 

But the country’s financial regulator is not taking a hands-off approach in matters of regulation. Mark Branson, the President of Germany’s regulator, BaFin, commented in December that ‘‘just (letting) the industry grow as a playground for grownups was the wrong tactic.’’ He made the remarks during the contagion around the collapse of FTX. Further, Branson believes that as the industry continues to have links with the traditional financial sector, stringent laws are essential for stability.