Banks in Germany can sell and store cryptocurrencies from 2020, according to new legislation passed in German parliament. The bill will come into effect from 1 January 2020 and should bring further clarity to financial institutions in the state. This is a big step for crypto and could have an impact on how other nations handle crypto assets in the future.
Germany’s stance on crypto so far
At the G20 summit in February 2018, Germany’s economic experts and senior bankers sided with France when they called for deeper investigation into, and regulation of, Bitcoin and other digital assets. However, it was later decided that no further regulation would be implemented at that point.
In April 2018, the Deutsche bank called for a regulatory crackdown on digital assets, claiming that cryptocurrencies like Bitcoin lead to increased financial fraud and cybercrime. However, in the same month Wertpapierhandels Bank, a German securities bank, launched a crypto asset trading service, partnering with Solaris bank. Moon Banking further reported that Bayrische Landesbank, Commerzbank, Fidor, GLS Bank, Landesbank Baden-Württemberg, N26, Norddeutsche Landesbank, and Sparkasse are all crypto-positive financial institutions, while Deutsche Bank is seen as being unfriendly towards digital assets.
What’s the deal?
Up until now, there hasn’t been much of a regulatory framework surrounding cryptocurrencies in Germany, which has meant that banks have been reluctant to offer crypto asset services. This new law will likely change that. Handelsblatt, a German publication, originally reported that banks are barred from offering crypto assets. However, Coinbase allegedly spoke with a crypto industry expert who stated that there was no digital asset ban, although one had been considered earlier in the legislative process.
Sven Hildebrandt, the head at DLC, a consulting firm, told Handelsblatt:
“Germany is well on its way to becoming a crypto-heaven. The German legislator is playing a pioneering role in the regulation of [crypto assets]. “
BdB, a German banking association, also spoke positively about the new laws:
“Credit institutions are experienced in the safekeeping of client assets and in risk management, are committed to investor protection and have always been controlled by the financial supervision.”
As a result, banks will now be able to “effectively prevent money laundering and terrorist financing” with digital assets.
The bill will also allow investors to put their money back into the country via crypto investments, rather than abroad.
Still, not everyone is pleased by this development. Niels Nauhauser, a financial expert at Baden-Wuerttemberg, told Handelsblaat:
“If [banks] are allowed to sell cryptocurrencies and keep them for a fee, they run the risk of turning their assets at risk of total loss to their clients, without them knowing what they are getting into.”
Germany is setting a precedent
Banks in Germany can sell and store cryptocurrencies from 2020, and this is setting a precedent for other countries around the world. So far, there’s a little regulatory framework for digital assets on a global scale, but this new advancement from the European nation could signal a major change in opinion toward digital assets.
As of now, Germany is one of the few countries to welcome crypto with open arms. Other nations embracing digital assets include Malta, Bermuda, Switzerland, Estonia, Singapore, Japan, and Gibraltar. Not only countries, trading platforms like eToro have also contributed to the widespread interest in crypto by offering a platform that allows traders to learn how to trade the cryptocurrencies, and even buy some themselves. With the news of major countries like Germany now selling and storing cryptocurrencies, this is a sure sign that mainstream adoption is just around the corner.
Another lesson from the Germans, for the world.
Recently, a bill passed in Germany now allows banks to sell and store cryptocurrencies for customers from January 1, 2020.
— Bitbns (@bitbns) December 12, 2019
How could this impact other nations?
According to new legislation, banks in Germany can sell and store cryptocurrencies from 2020. This could have a major impact on how other countries handing the implementation of regulatory frameworks for digital assets going forward. As of now, only a handful of countries are really seen as “crypto-friendly”, with many nations remaining largely suspicious of crypto assets. However, sentiments are changing. China’s President Xi Jinping gave a speech lauding the value of blockchain technology in October 2018, and even infamously crypto-unfriendly Russia is set to launch their very own CryptoRuble [commissioned by none other than President Vladimir Putin himself].
What’s infinitely clear is that times are changing. As governments and financial institutions grow more accepting of digital assets, the general population will likely move closer to mass adoption. Germany is definitely setting a precedent here, and it’ll be incredibly interesting to follow the countries movements in the crypto-asset industry going forward.