Coinbase Gets Permission to Operate as a Crypto Custodian in Germany

The Federal Financial Supervisory Authority (BaFin) has granted American cryptocurrency exchange Coinbase the right to offer cryptocurrency custody services in Germany. Per a report on the financial regulatory authority website, the exchange is the first to receive such a license in the country.

“Coinbase Germany GmbH is, therefore, the owner of the first license issued by BaFin for the crypto custody business that was newly introduced as a financial service.”

Coinbase Expands its Influence

Reacting to the news, Coinbase reiterated its desire to introduce a wide range of cryptocurrency offerings to customers in Germany as part of its efforts to expand its services to the international community. Marcus Hughes, the Managing Director for Europe said:

“Being awarded the license is the culmination of many months of hard work from the Coinbase team, in close collaboration with the BaFin. We look forward to bringing a best-in-class crypto product offering coupled with a secure, localized experience to our German customers.”

Despite adopting an open-minded approach to innovations in the finance space, the regulatory body is making good on its earlier promise to “have a closer look at business models” in the wake of increasing scandals. The financial watchdog was heavily criticized for failing to checkmate a saga that involved the collapse of Wirecard and Greensill, two companies in which it operates.

BaFin set up an interdisciplinary committee that will oversee “complex issues relating to crypto custody businesses”. The committee will supervise businesses operating in the cryptocurrency space and ensure that their operations remain in line with existing regulations.

Other Regulatory Approvals for Coinbase

Meanwhile, BaFin’s approval comes off the back of the Financial Services Agency (FSA) license which permits Coinbase to operate as a registered cryptocurrency exchange in Japan. The Japanese regulatory body updated its licensed cryptocurrency exchange list to include Coinbase, with the company allowed to offer Bitcoin (BTC), Bitcoin cash (BCH), Ether (ETH), Stellar lumen (XLM), and Litecoin (LTC) trading services to citizens and residents in Japan.

The American exchange has continued to explore new possibilities in fintech. It became the first cryptocurrency company to list publicly on the Nasdaq stock exchange market in April this year, after favoring a direct listing over the more conventional IPO (Initial Public Offering).

The milestone achievement was lauded by many cryptocurrency enthusiasts, critics, and competitor exchanges, with emphasis on the wider exposure for the industry which could lead to increased acceptance of crypto as a mainstream asset class. Coinbase has also added more cryptocurrencies to its exchange to meet growing customer demands. It recently listed meme-based cryptocurrency, Dogecoin (DOGE), the leading stable coin, Tether (USDT) and Cardano (ADA). CEO Brian Armstrong tweeted it will “list every asset where legally possible.”

Binance Suffering

While Coinbase have scored consecutive wins in the fight for regulatory approval, it has been a tale of woes for Binance. The UK regulatory body, Financial Conduct Authority (FCA) recently banned the leading exchange from conducting regulated activities in the country. It had earlier also issued a ban on the sale of cryptocurrency derivative products to retail investors in the UK.

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