Amsterdam-based ING Bank allegedly works on crypto custody solutions to help customers store digital assets securely.
As Reuters reported on 11 December, sources “familiar with the subject” point out that the main objective of the initiative is to provide the bank’s customers with secure crypto storage. The custody project is operated from Amsterdam and is still in an early stage.
Responding to Reuters, ING said in a statement that it “sees increasing opportunities with regard to digital assets on both asset-backed and native security tokens” and places particular emphasis on the development of blockchain technology to open the sector to customers, providing them with “compliance-compliant access to this emerging ecosystem”.
ING has been increasingly active around the blockchain arena this year. The Bank is already contributing to a number of blockchain initiatives.
In April, ING announced that they are working on a privacy technology called “Bulletproofs”. It is designed to hide the amounts being transferred in bitcoin transactions to protect their customers’ data. The bank is also working on blockchain-based trade finance in the framework of R3’s Marco Polo project, a consortium project and another in partnership with ABN Amro, also a Dutch bank. In January, ING signed a five-year license agreement with R3 to use the Corda Enterprise platform.
ING’s Crypto Custody Project – a sign of the time?
Interestingly, ING’s apparent crypto custody effort follows the bill recently passed by the German Parliament. It allows German banks to directly sell and custody cryptocurrencies for their customers from 2020.
That development sent shockwaves through the crypto-economy, as Germany is currently an extremely influential state; not just in Europe but also on the wider world stage. Other nations will undoubtedly follow suit in passing similar laws. This could trigger a domino effect of crypto legitimization in the increasingly interconnected markets of the world.
The debate, for now, seems to be a matter of when and not if; this is to say the question here is what other countries will follow in Germany’s stead first. And not whether other nations will do so at all. Against this background, ING’s crypto custody solution could be in the works, as the bank’s management expects that it will soon be able to legally hold its clients’ crypto holdings in safe custody as well.
Of course, different laws apply in the Netherlands and Germany. But the custody work of the Dutch bank may be an indication that cryptocurrencies are on the way to a much broader introduction. To this end, the bank could simply try to do its homework early.
The number of banks interested in crypto is growing
So far, more and more banks announce that they will offer custody services for cryptocurrencies such as Bitcoin and Ethereum in the near future.
With the entry into crypto custody of assets, ING is one of the few traditional financial institutions that has so far opted for this step. Fidelity’s Digital Asset Division introduced custody services earlier this year, as did Bakkt. A plan by Japanese bank Nomura to offer institutional custody for digital assets was postponed to 2020 in the spring. Otherwise, only a few smaller banks, such as Julius Baer and the Swiss branch of Arab Bank, have decided to offer the service to attract clients. VISA also participated less directly in the financing of Anchorage this summer; these raised funds for the implementation of a project in the field of crypto-custody.
In addition, Solaris Bank, licensed in Germany, announced its new Solaris Digital Assets project, another crypto custody project. It uses a distributed cluster of hardware security modules linked to a digital accounting system.
Interested in other crypto custody pilot programs?
Read on here: Diginex launches institutional-grade custody for digital assets