Cryptocurrencies might finally go hand in hand with traditional money services. Starting from 2020, it might be legal for German banks to sell cryptocurrencies like Bitcoin and provide custody solutions, local media reports.
GERMANY WELCOMES CRYPTOS WITH OPEN ARMS
Currently, financial institutions operating in Germany are not allowed to directly sell cryptocurrencies to their clients. However, this could change in the future thanks to the planned law that implements the fourth EU Money Laundering Directive. The bill already passed Germany’s federal parliament (Bundestag) and now it awaits the consensus of the 16 states.
The final version of the bill goes beyond money laundering and what was previously planned, as it proposes to allow regulated banking institutions to provide cryptocurrency services without relying on third-party custodians and special subsidiaries, as it is currently required.
The German crypto community is pleased with the new version of the bill. 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 states greenlight the proposal, German citizens will be able to hold Bitcoin, Ethereum, and other digital currencies directly in banks. Also, banks will provide online banking solutions for the whole range of assets, like stocks, bonds, and cryptocurrencies. This means that crypto holders will access their funds at the touch of a button.
Interestingly, the Association of German Banks (BdB) also welcomes the new regulation. It argues that lenders are experienced at storing client assets and risk management. The new law might prevent crypto-related money laundering and allow German investors to enter the crypto space via domestic funds.
GERMAN CONSUMER EXPERTS EXPRESS WORRIES
However, not everyone is happy with the proposed bill. The consumer center of Baden-Wuerttemberg is worried that banks will engage in more aggressive sales with the new products. Financial expert Niels Nauhauser said German that banks are now targeting new customers using all means, and they might fail at notifying clients on potential risks of investing in cryptos.
Financial commentator Fabio De Masi of the Left Party warned that while banks were looking to profit from cryptocurrencies, the financial consumer protection must not be undermined.