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Hauck & Aufhäuser, one of the oldest German banks is making a play for the emerging cryptocurrency space with the launch of a crypto fund early next year. Commercial banks in the country continue to show a significant appetite for virtual currencies on the back of a firm but a favorable regulatory mandate from government authorities.
DAIC Crypto Fund for Bitcoin, Ether, and Stellar
According to Fundview on Dec. 3, Hauck & Aufhäuser seeks to introduce a cryptocurrency fund by January 2021 under the stables of its digital investment arm, Hauck & Aufhäuser Innovative Capital (HAIC). HAIC will partner with the Berlin-based fintech company, Kapilendo, to launch the fund.
Dubbed HAIC Digital Asset Fund I., it will cover three crypto-assets namely Bitcoin, Ether, and Stellar. Also, the new crypto fund targets semi-institutional and institutional investors. While the subscription period is unlimited, the minimum entry point for investors is set at 200,000 euros ($243,000).
Commenting on the bank’s new crypto fund, Holger Sepp, a member of the bank’s board of directors, said:
“We see that digital assets and crypto currencies are becoming increasingly attractive to institutional investors.
With the launch of our first crypto-fund, we have created an innovative investment vehicle together with Kapilendo, which provides our customers with a cost-effective and secure access to the novel asset class crypto, while meeting the established quality standards and high demands of Hauck & Aufhäuser.”
BaFin License Superseded The Fund
Hauck & Aufhäuse’s soon to be launched crypto funds is coming after the bank secured a BaFin license for its digital asset investment subsidiary dubbed Hauck & Aufhäuser Innovative Capital (HAIC) back in Sept. 2020. The BaFin license allows HAIC to operate as a duly-registered capital management company.
At the time, the bank’s senior hierarchy was already alluding to a foray into cryptocurrencies, with board member Michael Bentlage highlighting:
“Forecasts predict a growing demand for fund products for digital assets and we are also seeing strong interest on the customer side. Therefore it is important for us to set the right course at an early stage and to give our customers access to this innovative asset class.”
Previously, BaFin classified cryptocurrencies as financial instruments thus paving the way for institutional access to the asset class. Back in Nov. 2019, regulators in the country began developing a legal framework for banks to function as cryptocurrency custodians, a necessary development for broad-based institutional involvement.