The Block: Visa-backed SolarisBank enters into crypto custody space

German fintech firm SolarisBank, backed by notable investors including Visa and Spanish banking giant BBVA, has ventured into a crowded cryptocurrency custody market.

Announcing the news Wednesday, SolarisBank said it has set up a new unit, Solaris Digital Assets, to provide custody services. “Our custodial solution stores the private keys on a distributed cluster of hardware security modules, that are connected to a digital bookkeeping system,” said the bank, adding that it helps keep assets under custody out of reach of hackers but still “instantly” accessible to end-users.

SolarisBank’s custody service, like its banking services, is available via an application programming interface (API), to businesses including banks and exchanges. “Our APIs hide smoothly behind your frontend, meaning you can offer your solution entirely in your branding,” said SolarisBank. A new law in Germany, which comes into effect on Jan. 1, 2020, requires any company offering crypto services to be authorized by the country’s financial regulator BaFin. Solaris Digital Assets said it will “take care of the regulatory requirements,” without providing details like whether it has already applied for a license.

SolarisBank, on the other hand, has a German banking license. It has provided services to blockchain banking startup Bitwala, security token offering platform Bitbond, and Boerse Stuttgart Digital Exchange, among others.

SolarisBank is a well-funded startup, having closed €56.6 million (~$62.7 million) in Series B last year, with participation from Visa, BBVA, Lakestar, and ABN AMRO’s Digital Impact Fund, among others.