DZ Bank AG, Germany’s third-largest depository, has unveiled a new blockchain-backed platform for the processing and custody of digital financial instruments for institutional clients, according to an announcement post on November 2.

The announcement is another sign that institutional investors have continued to enter the crypto space despite the prolonged bear market.

“We assume that within the next ten years a significant proportion of capital market business will be processed via distributed ledger technology (DLT)-based infrastructures,” Dr. Holger Meffert, DZ Bank’s head of securities services and digital custody, said in the translated post.” In the medium term, we see DLT as a complementary technology to the established infrastructures in the existing capital market processes.”

In 2022, DZ Bank began to build out the digital custody platform. To help operate the new platform, the bank has hired more than a dozen new employees across IT, operations and compliance.

DZ Bank will initially provide custody services for crypto securities, including a crypto bond from Siemens, which DZ Bank subscribed to six months ago.

Earlier this year, DZ Bank selected Swiss firm Metaco as its technology partner in building digital asset custody solutions. Metaco has similar partnerships with CitiBank, Societe Generale and DekaBank.

In June, DZ Bank applied for a crypto custody license from the German financial regulator – Federal Financial Supervisory Authority (BaFin) – which would enable institutional clients to directly invest in cryptocurrencies such as bitcoin (BTC). The Bank is also working on a way to offer private clients the same access to crypto investments.