Traditional finance and cryptocurrencies have finally found a connection. As per recent reports, starting 2020, it might be legal for German banks to sell cryptocurrencies like Bitcoin and Ethereum and also provide custody solutions.
Bill Awaits Consensus of 16 States
In the present scenario, German financial institutions are not allowed to sell crypto assets to their clients. However, as per the 4th EU Money Laundering Directive, things could change in the coming future. The bill has been passed by Germany’s federal parliament (Bundestag) and is awaiting the consensus of 16 states.
While the bill is titled around money laundering, it has proposed allowing regulated banking institutions to provide crypto-related services without the help of third-party custodians.
Sven Hildebrandt, head of consulting firm Distributed Ledger Consulting (DLC), said:
Germany is well on its way to becoming a crypto-heaven. The German legislator is playing a pioneering role in the regulation of cryptocurrency.
If the proposal sees greenlight, German citizens will soon be able to hold Bitcoin, Ethereum and other digital currencies directly in banks. Soon, Banks will also be able to provide online banking solutions for a whole range of assets, like stocks, bonds, and cryptocurrencies. Thus, making crypto holders access their funds at the tap of a button.
The Association of German Banks (BdB) has also welcomed the legislation. They have further put forth an argument that lenders are experienced when it comes to storing client assets and risk management. The new law will help curb crypto-related money laundering and allow German investors to enter the crypto space with domestic funds.
Consumer Center of Baden-Wuerttemberg Expresses Displeasure
While the news was welcomed by the German Banks Association, the consumer center of Baden-Wuerttemberg believes that banks will engage in more aggressive sales with the new products. On the other hand, financial expert Niels Nauhauser believes that banks are now targeting new customers using all measures, and they may possibly fail at educating clients on potential risks of crypto investments. Also, financial commentator Fabio De Masi warned the financial consumer protection of customers is at risk.
Rising Crypto Adoption
A few days back, as reported by Coingape, Switzerland, is gearing to develop yet another crypto hub. If the new partnership between crypto valley Zug’s crypto lobbyists and Zurich’s tourism Czars is executed, the valley could soon witness a northward expansion.
Also, Lesotho, a nation in the South African sub-continent has recently signed a memorandum of understanding (MOU) with the Apollo Foundation for creating a multi-functional cryptocurrency.