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Germany’s Stronghold in Blockchain Funding: Defying Global Trends

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Germany has bucked the current global trend of declining performance in the blockchain market, achieving an unprecedented feat in venture capital funding share in 2023. In a report published by Crypto Valley Venture Capital [CVVC] titled “The German Blockchain Report 2023, “Germany’s blockchain sector has landed a total of $355 million in investments through 34 deals. This represents a noteworthy 3% year-over-year [YoY] surge in funding for the Western European nation, as reported by CVVC.

What sets this achievement apart is that the nation has not only maintained its funding growth but has also garnered its highest-ever share of global blockchain funding. The country has attracted a substantial 2.4% of the world’s blockchain funding and engaged in 2.5% of global blockchain deals. This marks a substantial upturn compared to 2022 figures, which stood at 0.9% in global funding and 1.9% in global deals, showcasing Germany’s remarkable ascent in both aspects.

Germany

In the context of Europe, the nation has also cemented its position as a leading beneficiary of blockchain funding within the region. The report highlights that it has captured a significant share, securing 9.4% of blockchain funding based in Europe and contributing to 10.3% of all European blockchain deals.

Remarkably, Germany’s financial success in the blockchain sector comes amidst a backdrop of declining venture capital funding across all continents. The report cites the gradual year-over-year declines in funding across continents, with a striking 62% drop in funding and a 44% decrease in deals compared to the preceding four-quarter period on a global scale.

Meanwhile, Deutsche Bank, Germany’s leading financial service provider that boasts nearly one and a half trillion dollars in assets, has launched custody services for its clients’ cryptos. The 153-year-old banking giant joins the ranks of banks like Standard Chartered, BNY Mellon, and Societe Generale, all of which offer crypto custody solutions.

Germany’s Deutsche Bank Take on Crypto

Deutsche Bank has teamed up with Swiss crypto firm Taurus to provide crypto custody services and address tokenized assets, as per a press release.

In summary, Germany’s exceptional performance in blockchain funding stands out as a beacon of success amid a global decline in venture capital investment. This accomplishment is a testament to the country’s resilience as well its growing significance in the world of blockchain and cryptocurrency, even as the industry grapples with evolving narratives and challenges.

Germany’s Banking Giant Commerzbank Has Submitted Application for Crypto License

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Commerzbank, one of Germany’s top banks, has acknowledged that it sought a local cryptocurrency license early this year, marking the very first time a major bank has initiated a step toward cryptocurrencies in the country.

On April 14, a Commerzbank representative told Börsen-Zeitung that the bank “applied for the crypto custody license in the first quarter of 2022.” If allowed, it will be able to provide exchange services as well as crypto-asset custody and protection.

The cryptocurrency offering would apparently target Commerzbank’s institutional client base, with over 18 million consumers and over 70,000 institutional clients.

Commerzbank listened to the customers

Since January 1, 2020, any company intending to provide cryptocurrency services in Germany must first get authorization from the BaFin (Germany’s Federal Financial Supervisory Authority).

Only four companies have received clearance so far, but BaFin says it has over 25 applications pending from companies interested in operating crypto custody operations.

Coinbase Germany was the first company to receive approval from the authority in June 2021, while Upvest, a Berlin-based financial technology startup, was the most recent to receive approval in March.

Commerzbank began working on blockchain initiatives in 2018. The following year, it completed some of the first transactions on a distributed ledger technology (DLT) secure lending platform with other big banks.

In August 2021, the company announced a collaboration to create blockchain-based digital markets for current asset classes, including art and real estate.

In 2021, Germany enacted a slew of laws, rules, and policies to accelerate the use of blockchain technology and cryptocurrencies.

German investors are also interested in cryptocurrencies. According to a March research by Kucoin, 44% of Germans are “inspired to invest in cryptocurrencies,” and 37% of German crypto investors have been trading for over a year.

According to the survey, the continued development of legal legislation for the decentralized business in Germany has resulted in 16 percent of the German population aged 18 to 60 being crypto investors who possess or have traded cryptocurrencies in the last six months.

According to statistics, 41% of the aforementioned crypto investors want to raise the percentage of their investments in cryptocurrency in the next six months. Another 13% of Germans are interested in cryptocurrencies and want to invest in them in the next six months.

Coinbase’s Germany Arm Gets Approval From Germany’s BaFin

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The New York-based cryptocurrency exchange, Coinbase has announced receiving a crypto custody license from Germany’s Financial Supervisory Authority [BaFin]. Under the new licensing regime, Coinbase will now be able to continue serving the German market.

In addition, the license of the country’s chief regulatory body would also enable the cryptocurrency exchange to serve as a custodian for other crypto offering businesses and services. According to the official press release, Coinbase has now become the first company to receive the license,

Following the development, Marcus Hughes, Coinbase’s Managing Director for Europe was quoted saying,

“Being awarded the licence 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, localised experience to our German customers.”

The Bundestag, the German parliament, had passed a law in November 2019 that needed companies offering cryptocurrency custody for its citizens to apply for a crypto custody license or leave the country. As a result, the Nasdaq-listed crypto platform had applied for the license later next year.

Coinbase expansions intact as Binance faces scrutiny

The regulatory clearance from Federal Financial Supervisory Authority [BaFin] comes in the heels of after Coinbase received a green signal from Japan’s regulatory watchdog Financial Services Agency [FSA] to foray into the country’s crypto ecosystem. It is important to note that the US-based public cryptocurrency exchange has managed to expand its footprint across the world rather quickly since going public in the United States with a direct listing in April this year even as its stock has fallen significantly over the same period.

The same cannot be said for its competitor Binance which has been facing significant challenges in several countries. Over the past week, the cryptocurrency exchange has suffered a crackdown from Japan, UK, and Canada regulators regarding its operations in the respective countries.

German Central Bank Steers Clear Of A CBDC; Blockchain-Based System Underway

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Deutsche Bundesbank, the German central bank seems to be clear on its stance regarding the development of a CBDC. In its latest announcement, the bank revealed that it was instead focusing on the incorporation of blockchain technology.

China’s plunge into the development of central bank digital currencies (CBDC) has inspired several countries to get into this race. While an array of governments have been fearing china’s dominance over the financial sphere with it’s CBDC launch, Germany seems to be untethered. The country has time and again revealed that it doesn’t intend on rolling out a CBDC. Its latest move further reveals that the country aspires to function without a CBDC.

German Bank To Lay Its Focus On The Development Of Blockchain Tech

The German central bank seemed to be relaxing while all the governments are trying get ahead in the CBDC game. In a recent post, the bank pointed out that it was successful in testing a settlement interface for securities. However, this is via the distributed ledger technology [DLT]. With this, the country intends to bring blockchain tech into the conventional payment systems.

The Executive Board member of Deutsche Börse, Stephan Leithner, spoke about this innovation and said,

“New technologies are a key component in creating infrastructures of tomorrow that meet the markets’ needs. This project marks a major step towards more efficient securities settlement and securities digitalisation by combining new technologies with existing infrastructures in a smart way.”

While this would facilitate payments through blockchain tech, the post eliminated the need for the creation and development of a CBDC. This statement was a clear indication that the German bank wanted to go about without a central bank issued currency.

The post further elaborated on the project as it read,

“This test sees Bundesbank and Deutsche Börse now joining forces with the Finance Agency to continue the work they started on the Blockbaster (blockchain-based settlement technology research) project back in 2016. The functionality of blockchain technology in securities settlement and the cash leg settlement of transactions was successfully demonstrated in previous project phases.”

Berlin based Solarisbank has plans to dominate European digital sector with help of Samsung

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Digital financial ecosystems have come a long way since being an extremely niche industry a couple of years back. Major organizations like Solarisbank were now on the brink of creating a new financial world where traditional concepts meet the benefits of the digital sphere.

Just recently, Berlin-based Solarisbank revealed that they would be expanding to several European regions by the end of 2021. This growth was synonymous with the growing adoption rate of the digital economy around the world.

Solarisbank chief executive Roland Folz claimed that the move to other countries was an important step in terms of global acceptance.  The organization was also the first bank in Germany to shift toa completely cloud-based system. Solarisbank first shot to fame for its “banking as service” model which drew in some big names from the tech industry.

Samsung remains one of Solarisbank’s largest clients with the South Korean bigwig using the former’s technology for Samsung Pay transfers. The rapid rate of capital movement can be handled by Solarisbank now because of the movement from traditional architecture to Amazon Web Services [AWS].  All of Solarisbank’s core systems were moved to the web hosting service within a year of the company’s launch.

The expansion announcement was considered a major landmark in Solarisbank’s history with Mr. Folz adding:

“We want to grow with our existing partners and ensure that they can spread their business and value proposition across Europe. The ambition level could be higher. The opportunity is there to build a substantial financial powerhouse for any of the big techs out there.”

Samsung’s reach in the global technology sphere contributes to a major portion of Solarisbank’s growth. Statistics showed that there are over 80 million Samsung mobile devices present in Europe, a staggeringly large playing field. Even grabbing a small percentage of this market share would give Solarisbank;’s the major foothold it needs in the continent. This tactic could also help Solarisbank grab a larger piece of the bank account’s pie, a number rising rapidly daily.

 

 

German Finance Minister Makes it Clear that Cryptocurrencies and Blockchain are Important for Economic Recovery

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The cryptocurrency market has come a long way since 2010 when Bitcoin first entered the mainstream financial ecosystem. Since then the world of virtual assets has made progress across multiple sectors while also garnering its fair share of critics and detractors.

Germany has taken the next step in cryptocurrency adoption with German Finance Minister Olaf Scholz assuring the country that crypto reforms and regulations will be sped up as soon as possible. The minister’s statements come at a time when the country was laying down plans to revive the dwindling economy. 

The COVID-19 resultant lockdowns have affected several medium and small scale businesses with many on the verge of shutting shop. According to Olaf Scholz, the German government was seriously considering the European Commission’s proposals to regulate cryptocurrencies as well as its foundation-blockchain technology. Mr. Scholz stated:

“These are important proposals to make Europe’s financial sector really strong. My goal is to move the discussions forward quickly. With the package we can promote innovations in the financial sector so that Europe sets standards worldwide. In order to get out of the crisis with full power, small and medium-sized companies in particular need good access to capital market financing.”

Germany will also be considering the EC plans to expand the pertinent bloc’sd capital markets. This is expected to act as a stimulus for the German economy and help millions of citizens stuck in limbo. Germany is currently the presiding member of the European bloc and will lead a discussion about the reform packages during an October 6 finance meetings meeting. The coronavirus pandemic has wiped out financial progress made over the past decades and governments were on the throes of major changes.

Countries in Europe were currently working together with other nations across the globe, who were also in the same boat. Germany was one of the few regions which recognized that uplifting every strata of society were imperative to overall economic growth. Cryptocurrencies and blockchain technology are set to play important roles in helping the economy, with faster and seamless transactions on the cards. Reports have shown that decentralized technologies were the way forward with traditional banks also going the same route.

Covid-19 Forces Germany into Recession; Over 100 Banks Charging Negative Interest Rates

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According to an announcement made late last week by the Statistisches Bundesamt, as COVID-19 forces Germany into recession, with the biggest quarterly decline since the 2008 international financial and economic crisis, over 100 banks in the nation have started charging clients negative interest rates.

According to data shared on May 15 by Germany’s Federal Statistical Office, Statistisches Bundesamt, the European heavyweights have now entered the recession. As per the data shared by the German Federal Statistics Office:

“The corona pandemic hits the German economy hard … [Q1’s contraction] was the largest decrease since the global financial and economic crisis of 2008/2009 and the second-largest decrease since German unification.”

COVID-19 forces Germany into recession

Moreover, the statistical agency claims that a substantial decline than the latest fall was only recorded back during Q1 of 2009 with a -4.7 percent drop. During Q1 this year, Europe’s biggest economy dropped off by 2.2 percent. In addition, the Eurozone economy recorded a sharp 3.8 percent decline within the same period.

COVID-19 forces Germany into recession

German economists, including the experts from Deutsche Bank, predict an even greater tumble during Q2, as the impact of the COVID-19 pandemic becomes evident. Chancellor Angela Merkel apprises that if the transmission rate of COVID-19 rises, Germany could be forced back into forced lockdown.

Number of banks charging negative interest rates escalating 

Over the recession period and over the course of the coronavirus pandemic, the number of financial institutions charging negative interest rates has been escalating fast. Back in April, only about 80 banks were charging their clients negative interest rates. However, currently this number has increased to over 100 banks. 

According to the German consumer comparison portal, Verivox, over 800 German banks have been studied. Virivox’s investigation has revealed that over 100 banks are currently charging negative interest rates in Germany. The contrast portal has grouped the banks in three classifications.

Furthermore, 94 of the banks have shared their fresh rates online or on their price catalogues. On the other hand, 10 banks are charging fees on demand deposits accounts that are normally free, giving an actual negative interest rate on such accounts. As per the portal, 22 other banks are also charging negative interest rates, but they are yet to publish the new rates online or share.