Co-op banks in Germany are considering offering cryptocurrency services such as Bitcoin and Ether trading, a survey by industry association Genoverband suggests.
The poll found that 71% of the country’s 670 Volksbanken and Raiffeisenbanken banks are looking at crypto – up from 54% last year.
A third of the banks looking at crypto say they aim to launch services within the next five months, but the rest are thinking more in the long term, with 21% looking at being ready within six to 12 months, and 17% warning it could take two years or longer to prepare.
DZ Bank (pictured), the central institution for the country’s co-op banking sector, is already under way with its crypto plans, after partnering last year with European exchange group Börse Stuttgart to provide retail cryptocurrency trading and custody services to its members.
It has completed a pilot with six banks – which kicked off with Montabaur based co-op Westerwald Bank – offering them a technical platform where they could operate crypto wallets and transactions.
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Growing demand from clients for crypto trading has increased pressure on co-ops and other legacy banks, which has given fintechs and other online disruptors the opportunity to step up competition.
Big players in the conventional banking sector, including Deutsche Bank and Sparkassen-Finanzgruppe, are also launching crypto services.
However, concerns remain over crypto. These range from warnings over the huge energy demands of the tech – with global Bitcoin mining thought to use as much energy as countries such as Poland or Switzerland – and its volatility, with the German Federal Financial Supervisory Authority warning “investments in crypto assets are highly speculative – and just as risky”. Regulators have noted that cryptocurrencies are not backed by central banks or governments.
Sparkassen has said it wants to give customers the chance to trade if they want to, but also warned: “The extreme volatility of the price makes [Bitcoin] a risky bet. Additionally, hacks and fraud on crypto platforms are increasing.”
As for the co-op sector, DZ Bank board member Souad Benkredda has said consumer demand is high, but that each individual co-op bank will have to make its own decision on whether to offer crypto services.
