Germany’s trillion-euro savings banks mull crypto wallet – Metro US

Germany’s trillion-euro savings banks mull crypto wallet

FILE PHOTO: Illustration shows representations of virtual cryptocurrencies
FILE PHOTO: Illustration shows representations of virtual cryptocurrencies

FRANKFURT (Reuters) -Germany’s savings banks, a conservative bastion that holds more than 1 trillion euros for thrifty Germans, is looking into offering a wallet to trade cryptocurrency, a group of the banks said on Monday.

The project marks a potentially radical departure for the banks, whose customers still use cash and eschew risky investing or heavy borrowing.

Entrusted with the savings and investments of roughly 50 million customers, they make up Germany’s biggest financial group.

“The interest in crypto assets is huge,” a spokesman for the German Savings Banks Association said, with reference to the pilot project. He said no decision had been taken and that the savings banks group was currently sceptical.

German magazine Capital first reported the news.

The move comes against a backdrop of high inflation and penalty charges on banks and savers from negative interest rates, fuelling a heated debate in Germany about central bank money printing.

It has prompted Germans to invest more in property and elsewhere to avoid what some have dubbed the “expropriation” of their wealth.

Last month, Helmut Schleweis, the president of the German Savings Bank Association, called the combination of low interest rates and rising prices a “toxic mix,” saying it had become harder to stop the erosion of wealth.

Bitcoin, the world’s largest cryptocurrency with a market cap of roughly $1.2 trillion, has risen strongly, fuelled in part by fears of inflation, with its limited supply seen as offering protection.

Bitcoin also has dozens of smaller rivals, all vying for a share of the wider $2 trillion digital currency market.

Among the major “altcoins” – as all cryptocurrencies aside from bitcoin are known – some, such as ethereum, aspire to be the backbone of a future financial system. Others, like Dogecoin, are barely used in payments.

Retail punters are pouring money into them, despite their volatile track record, in hopes of a quick profit.

(Reporting By John O’Donnell; Editing by Mark Porter and Jane Merriman)