Stefan Hoops, CEO of DWS, has warned most crypto coins are “between worthless and fraudulent” as his firm’s board outlines its approach to digital assets and intention to seek out potential acquisitions in the space.
Hoops (pictured), who replaced Asoka Woehrmann as CEO of DWS last June, took to LinkedIn last Friday to state the German asset manager believes tokenisation could be transformative despite scepticism from most market participants.
“In the early 2010s, Deutsche Bank sold its online payments business – because eCommerce was mostly porn and gambling back then. At the same time, Amazon and PayPal accelerated their impressive growth stories. Without a doubt, the majority of crypto coins are between worthless and fraudulent.
“Nevertheless, we believe in the future of a tokenised economy which will disrupt the current market structure. And we are convinced that investor interest in digital assets is here to stay.”
Given the strength of demand, Hoops added asset managers should offer a conventional route to gain exposure to the new asset class.
“We should develop safe access to digital assets rather than display Schadenfreude when our clients lose money dealing with dodgy BMX riders,” he said.
“Lots of work ahead of us in ensuring a proper control environment and establishing partnerships to develop products for our clients.”
His comments accompany the DWS board publishing its core beliefs on crypto including tokenisation creating opportunities the firm should address by “creating new products, reaching new clients and distribution channels, and taking on new roles to profit from market infrastructure shifts”.
It added tokenisation of liquid and illiquid assets will “become more material than cryptocurrencies” and offering its clients access to crypto will help it “prepare for tokenised assets”.
In an earnings call in February, Hoops said DWS was beginning to “assess strategic partners and commence due diligence on potential targets” in crypto.
“The drop in market prices for digital assets could present interesting opportunities that bring us to the next level, and we are actively preparing to address the likely legal and regulatory challenges associated with such a new opportunity,” he concluded.