German bank VPE has partnered with Berlin-based fintech company solarisBank to facilitate cryptocurrency trading for institutional investors, like hedge and pension funds.
The Securities trading provider is regulated by Germany’s financial watchdog, BaFin, and will become the first to offer such services in the country.
VPE said the ecosystem wasn’t prepared to handle large traders a couple years ago, and their customers weren’t asking for such digital assets. That all changed in 2017 when the crypto-market went mainstream as an asset class.
Unlike established financial markets, cryptocurrency trading is dominated by individual investors, which is evident by almost every metric, including the sharp price swings.
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Institutional investors and trading firms were eager to actively trade these instruments following the launch of bitcoin futures contracts by two of the leading futures exchanges in the US. Even though the Cboe and CME futures have allowed digital currencies to step into the mainstream financial system, the big players were challenged by lack of institutional-grade technology to support them.
The statement also revealed that solarisBank will offer a custodian service while customers will also receive access to an individual cryptocurrency wallet hosted by VPE. This will deliver stringent financial controls as well as secure storage, the company said.
Commenting on this, Katharina Strenski, Public Relations Manager at VPE, said: ”Cryptocurrencies such as Bitcoin, Litecoin, Ethereum and others have become a promising asset class in recent years. To date, trading digital tokens has been restricted to crypto exchanges and online market places. We are pleased to be the first German bank to offer our customers cryptocurrency trading services.”
”Until now, institutional investors have faced high entry barriers to crypto trading. Our cryptocurrency trading services offer a much more convenient alternative,” Strenski added.