Numerous crypto-currency inquiries confront Bafin.
The German financial supervisory authority, BaFin, is currently in the process of reviewing applications for crypto custodian licenses, following the granting of the first such permit to the crypto trading platform Coinbase on June 28, 2021.
The announcement by the German government came in response to a minor parliamentary inquiry by the FDP. However, the exact number of applications still pending with BaFin is not publicly stated. As of the current date, there are 26 applications for crypto custodian licenses in progress with BaFin.
The granting of additional licenses appears ongoing and depends on the applicants meeting BaFin’s regulatory requirements. Given BitGo's recent approval in July 2025, it is likely that additional licenses will be granted progressively as applications are reviewed and approved.
Each permit application raises different levels of review for BaFin. Companies based outside Germany may need a BaFin permit if their offer is specifically targeted at German customers. It is worth noting that the transition period for active crypto custodians to submit applications ended by the end of November 2020.
Since January 1, 2020, cryptocurrency custody providers in Germany have been required to obtain a BaFin permit. This regulatory measure aims to ensure the protection of investors and maintain financial stability in the growing crypto market.
In addition to cryptocurrency custody, other blockchain-related services in Germany (such as operating Bitcoin ATMs, crypto exchanges, proprietary or commission-based trading, investment advice, and brokerage services for cryptocurrencies) also require a BaFin permit. Applicants may need to submit additional documents to complete their applications.
The parliamentary inquiry also asked whether BaFin processes competitor applications simultaneously, and whether it is unfair competition if applications are processed at different speeds. However, the government's response did not address these specific questions directly.
Despite the ongoing review process, BaFin anticipates issuing more permits in the coming weeks. The European passporting system does not apply to the crypto market in Europe, so providers cannot operate in other EU countries with the permit of their home country. This means that the issuance of additional licenses in Germany could have a significant impact on the European crypto market.
In summary, the German financial supervisory authority, BaFin, is currently reviewing applications for crypto custodian licenses. The first license was granted to Coinbase before 2025, and BitGo received a crypto custodian license from BaFin by July 2025. The exact number of applications still pending with BaFin is not publicly stated. Additional permits may be issued continuously as regulatory compliance conditions are met, with no specific schedule publicly disclosed yet.
Technology plays a crucial role in the review process of finance-related applications, as applications for crypto custodian licenses are assessed based on an applicant's ability to meet BaFin's regulatory requirements.
The granting of additional licenses not only affects the business operations of crypto trading platforms within Germany but also has a significant impact on the European crypto market, considering the European passporting system does not apply to the crypto market.
