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European banks, encouraged by the regulatory clarity provided by the Markets in Crypto-Assets Regulation (MiCA), are now contemplating entry into the crypto industry.

MiCA Regulation, a significant legislative initiative by the EU, aims to establish a comprehensive global regulatory framework for crypto assets. Proposed by the European Commission in September 2020 and later ratified by European legislators in 2023, this framework enhances investor protection through stricter transparency requirements and the implementation of Anti-Money Laundering (AML) protocols.

With the approval of MiCA, European banks are increasingly open to offering crypto services, despite the need for additional technical expertise and infrastructure. To navigate the crypto landscape effectively, these banks are exploring partnerships with established organizations.

For example, Landesbank Baden-Württemberg (LBBW), Germany’s largest federal bank with assets exceeding $355 billion, has chosen to collaborate with the Bitpanda exchange to provide cryptocurrency custodial services. This partnership will extend crypto custody services to corporate and institutional clients starting in the second half of 2024.

Additionally, Bitpanda has teamed up with Raiffeisen, Austria’s largest community banking group, to offer cryptocurrency services to retail customers. This strategic alliance, announced last year, aims to empower users to secure their financial futures through a range of offerings including commodities, stocks, exchange-traded funds (ETFs), and precious metals.

The recent approval of spot Bitcoin ETFs in the US is poised to influence the interest of European institutions in crypto services. With the Securities and Exchange Commission (SEC) giving the green light in January, there has been a notable influx in the market, prompting similar initiatives in other regions.

Leading the market are BlackRock’s IBIT, Fidelity’s FBTC, and Grayscale’s GBTC. The 10 Bitcoin spot ETFs in the US collectively hold 837,330 BTC, equivalent to 3.987 percent of the total Bitcoin supply, with GBTC managing 304,970 BTC.

Hong Kong’s Securities and Futures Commission (SFC) recently approved spot BTC ETFs, positioning the country ahead of the US in this domain. Furthermore, Hong Kong has also sanctioned Ethereum (ETH) spot ETFs, with approvals granted to the local branches of China Asset Management and Harvest Global Investments.

Shown above, Shashank is the founder of yMedia, with a crypto journey that began in 2013, identifying as an ETH maximalist.

Twitter: @bhardwajshash

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