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Germany to allow banks to sell and store crypto assets

Germany has passed a new law that will enable banks to sell and store bitcoin and other crypto assets in 2020. The bold move will cement Germany’s position as one of the most crypto-friendly jurisdictions in the world.

On November 27, the Handelsblatt reported that German financial institutions will soon be allowed to sell and custody digital assets according to a new law that has been passed by the German federal parliament to implement the fourth EU Money Laundering Directive. German lawmakers expect the new law to be passed by the country’s 16 states and go into effect in 2020.

Some BTC with your euros?

To date, only a limited number of German banks have offered crypto-related services. That may be about to change as Germany pushes into the forefront of crypto hubs with the new regulations that enable credit institutions to offer bitcoin purchases and storage to their online banking clients with the click of a button.

Dr. Sven Hildebrandt, a partner at blockchain consulting firm Distributed Ledger Consulting GmbH, welcomed the news. He 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 cryptocurrencies.”

The new law was also well-received by the Association of German Banks (BdB), the country’s leading lobbying group for financial institutions. The industry body said that credit institutions are experienced in the custody of client assets and risk management. Additionally, they are committed to consumer protection and are under the oversight of the financial regulators. Moreover, they are effective in preventing money laundering and terrorist financing.

Not everyone shares the banking association’s enthusiasm, however. Niels Nauhauser, a consumer rights advocate, fears that banks may start to aggressively market crypto assets to their clients.

"Banks sell a variety of financial products if the commission is right. If they are allowed to sell cryptocurrencies and keep them for a fee, the risk exists that they could sell [crypto]assets to customers that could lead to a risk of a complete loss of funds, without clients fully comprehending what they are getting into," he told Handelsblatt.

Germany – “Das Crypto Hub”

German banking customers will soon be able to buy, sell, and store cryptographic assets, in the same way, they would stocks, bonds or mutual funds. In a country with over 33 million people who use online banking that opens up and legitimizes crypto – as an asset class – to a large proportion of the German populace.

Germans will soon be able to log onto their online banking accounts and buy digital assets in the same way they would buy BMW or Volkswagen stock. A service that seems years away given in the current state of crypto regulations in other major economies, such as China, India or even the US.

Germany also has one of the most investor-friendly laws for individuals, which also applies to crypto assets. For example, if you hold an investment – say bitcoin – for over a year, you will not be charged capital gains tax. Needless to say, that is a HODLer’s dream.

Furthermore, Europe’s largest economy has approved digital currencies such as bitcoin (BTC) as a legal payment method in 2018. According to Germany’s finance ministry, cryptocurrencies can be considered akin to legal tender when used as a means of payment.

Germany appears to be evolving into a blockchain hub. Its crypto-friendly regulations and openness to innovation combined with the tech startup scene in Berlin may make it a top contender to attract blockchain businesses and investors.

Others have urged a note of caution, however, arguing that while the new regulations opens the door to blockchain businesses, only those able to negotiate the significant regulatory hurdles will succeed.


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