Deutsche Borse Group, a major German stock exchange operator, announced that it acquired a majority stake of Crypto Finance, a FINMA-regulated digital asset firm that offers asset management, brokerage and storage infrastructure as well as tokenisation solutions. Also, the two firms signed the agreement in June and closed the deal on December 15, 2021.
With the purchase now at hand, Deutsche Börse stated that it would be able to provide its service partners and customers with direct and easy access to digital asset services including post-trade services. In addition, a broad range of digital assets is made accessible to existing customers and new market players through their established platforms. Though, the collaboration will serve to optimize processes and systems within the two sister companies.
As Crypto Finance is now part of Deutsche Börse, the digital asset service provider will leverage access to Deutsche Borse’s German market infrastructure and client network. The crypto service enabler will offer the backing of its strong capital base to further grow its team and strategically broaden both its service and product portfolio. Moreover, the partnership will help the crypto firm to intensify the expansion of its customer base, with a focus on Germany in Europe and Singapore in Asia.
Deutsche Börse’s Head of Cash Market, Eric Leupold talked about the development and stated: “Thanks to Crypto Finance’s proven expertise and the technologies they have developed, we can now enable financial institutions and professional investors to enter the digital asset market. This is a step further in our digital asset strategy.”
Meanwhile, Crypto Finance CEO and Co-Founder, Jan Brzezek commented about the development and said: “Established financial institutions increasingly want to start investing in digital assets and are looking for a trustworthy partner. With its reputation and broad expertise in operating financial market infrastructure, Deutsche Börse garners this trust.”
Additionally, Brzezek will remain the CEO of Crypto Finance, and his current management team will continue operating as an independent entity with its focus targeting fintech firms, asset management firms, banks and other financial intermediaries.
Eric Leupold has become the Chairman of Crypto Finance’s Board of Directors, a role which was previously occupied by Tobias Reichmuth, the Co-Founder of Crypto Finance.
Expanding Crypto Offerings Via Regulated Trading Venues
The development by Deutsche Borse buying the majority ownership of Crypto Finance comes at a time when the popularity of cryptocurrency trading is rising significantly among retail and institutional investors. In June 2020, Deutsche Börse became the first exchange in the world to launch trading in centrally cleared crypto products. As a result, investors currently have access to a continuously increasing number of exchange-traded notes (ETNs), unsecured debt securities, that track prices of cryptocurrencies (such as Bitcoin, Ethereum, Cardano, Solana, stellar, Polkadot, Litecoin, bitcoin cash, Tezos and Tron) offered by providers on Deutsche Börse stock exchange. With such offerings, Deutsche Börse’s Xetra trading platform is becoming the European market leader in crypto ETN trading.
Crypto ETNs provide important benefits to investors in various ways as follows. Since such products are traded on-exchange, investors do not have to go to unregulated trading platforms to invest in cryptocurrencies. With the accessibility of Deutsche Börse’s Xetra trading venue, investors can rely on using the largest- exchange based ETF trading platform with a high level of liquidity and the highest regulatory standard in Europe. Furthermore, investors do not need to create their own cryptographic keys or crypto wallets since the crypto ETNs products are traded on-exchange. Lastly, investors benefit from significantly reduced risks because of central clearing of the trades, which are operated by Eurex Clearing, a central counterparty owned by Deutsche Börse Group.
