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German financial giants launch crypto staking service

German financial giants launch crypto staking service

With every bear market, the question arises as to whether there are companies that want to enter the crypto world. But even during the last bear market, numerous large financial institutions recognized the benefits of cryptocurrencies and blockchain. Now work two the largest German financial institutions a crypto staking service.

German institutes Promote Ethereum staking

In a press release, B saidOrse Stuttgart Digital and Munich Re Group on plans to launch a crypto staking service next year. bOrse Stuttgart Digital is the blockchain-focused subsidiary of the Stuttgart Stock Exchange. and the Munich Re Group is a multinational insurance company.

There is said to be a growing interest in strikes in the European financial industry. This is why a “one-stop shop” for strike services is necessary. Munich Re has developed an insurance product for the Stuttgart Digital exchange that is intended to cover the risk of crypto stake services.

Together, the two companies want to offer staking to institutional investors without them taking the risk if, for example, a blockchain develops problems. The initiators cite “slashing” as an example. Validators who make their coins available to the Ethereum (ETH) network to confirm transactions for low returns must follow certain rules. If this doesn’t happen, they lose coins.

However, it can happen that a validator loses the allocated ETH without doing anything wrong. In this case, a validator could still lose their assets. With the new service, the two companies want to protect institutions from this.

For now it appears that only European institutions will be served. Retail investors and institutions in other parts of the world will therefore have to look elsewhere.

Cryptocurrency staking carries some risk

Staking sounds like a fairly risk-free cryptocurrency option, but it is not. For example, FTX also offered this option before the bankruptcy, but upon bankruptcy, customers were no longer able to withdraw their assets. As a result, Genesis also ran into trouble, specifically focused on strikes for financial institutions.

Hackers can also hack the platform that temporarily records your assets on the blockchain. This means that you can still lose your coins even if the platform is financially secure and the validator makes no mistakes. All in all, it’s certainly something to consider.

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