European institution's interest in crypto services may also be influenced by the approval of spot Bitcoin ETFs in the US
The largest European banks are now considering entering the crypto industry based on the clarity provided by the bloc's adoption of the Markets in Crypto-Assets Regulation (MiCA).
The MiCA Regulation is a legislative measure introduced by the EU to establish the inaugural comprehensive global regulatory framework for crypto assets. Initially suggested by the European Commission in September 2020, MiCA was eventually adopted by European legislators in 2023. This framework aims to protect investors by making transparency requirements stricter and implementing Anti-Money Laundering (AML) protocols.
Following MiCA's approval, European banks are more willing to create crypto services despite requiring further technical knowledge and infrastructure. As a result, they are seeking partnerships with acquainted organisations to navigate the crypto terrain effectively.
For Instance, Germany’s largest federal bank, Landesbank Baden-Württemberg (LBBW), boasting over $355 billion in assets under management, has opted to provide cryptocurrency custodial services in collaboration with the Bitpanda exchange. Under the agreement, LBBW and Bitpanda will extend crypto custody services to corporate and institutional clients, commencing in the second half of 2024.
Also, Bitpanda collaborated with Raiffeisen, Austria’s largest community banking group, to provide cryptocurrency services to its retail customers. The partnership, announced last year, aimed to help users build a secure financial future through various offerings, such as commodities, stocks, exchange-traded funds (ETFs), and precious metals.