One of the oldest German banks authorized to manage crypto assets

According to a press release dated Monday February 14, 2022, Hauck & Aufhäuser Innovative Capital (HAIC) received the KVG license from BaFin in early February 2022. The approval allows HAIC to “set up and manage investment funds as special assets that invest in native crypto assets or add them to a classic portfolio allocation ”. This is not the first time that the German private bank has taken an interest in cryptocurrency. In December 2020, the Hauck & Aufhäuser subsidiary announced a partnership agreement with Kapilendo, a Berlin-based fintech firm, to launch a crypto fund in January 2021. The fund, called HAIC Digital Asset Fund I, focuses on three cryptographic assets: bitcoin, ether and stellar. In addition, HAIC Digital Asset Fund I is open to institutional and semi-institutional investors, with a minimum entry point set at € 200,000. The latest development shows how German rules promote such cryptocurrency adoption. In March 2020, BaFin classified cryptocurrencies as financial instruments. Later, in July 2021, German lawmakers passed the Fund Allocation Act, which allowed institutional funds to allocate 20% of their cryptocurrency portfolio. Commenting on the new license, a board member of Hauck Aufhäuser Lamp, dr. Holger Sepp, said: «With our KVG for digital assets we are planning the launch and management of our digital asset funds, but as the principal KVG we also want to be available to finance initiators and asset managers as a service partner for their fund products. "

Sepp added: “In the future we will be able to offer the full range of services for digital asset investment products from a single source, starting from portfolio management, KVG services and fund administration up to custody and depositary ". With the growing popularity and maturity of the cryptocurrency industry, more and more financial institutions are delving into the industry, following customer demands. Banks' interest in the burgeoning sector runs counter to previous negative sentiments held by these institutions. Vast Bank, which completed an end-to-end crypto transaction in partnership with leading cryptocurrency exchange coinbase, unveiled its crypto banking services for US-based clients in August 2021. The investment banking giant Morgan Stanley in March 2021 became the first major US bank to offer clients access to bitcoin funds. According to reports, BTC funds would only be available to its wealthy clients due to the volatile nature of bitcoin. Several banks in the United States have launched or are planning to establish crypto-custody services. The U.S. Bank partnered with digital asset management firm New York Digital Investment Group (NYDIG) in October to offer cryptocurrency custody services to institutional clients. Northern Trust and Standard Chartered have partnered to offer similar services for institutional investors. Others include Bank of New York Mellon (BNY Mellon) and CitiBank.