From next year, banks in Germany will be allowed to offer the sale and storage of cryptocurrencies under new legislation.
Previously, banks were barred from offering direct access to crypto assets, but the new law implementing the fourth EU Money Laundering Directive would change that, according to local business newspaper the Handselblatt in a report on Wednesday. The bill has already been passed by the German federal parliament, the Bundestag, and is expected to be signed off by the nation’s 16 states.
The bill goes further than had been previously planned, the report says. Originally, banks were not to be allowed to act as crypto custodians, and were to have relied on external custodians or dedicated subsidiaries.
Sven Hildebrandt, head of the consulting firm DLC, welcomed the news, telling the Handselblatt: “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]. “
German banking association BdB was positive about the legislation, too. “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,” it said. As such, banks could “effectively prevent money laundering and terrorist financing” with crypto assets.
The incoming bill would further enable investors to invest in cryptos via Germany-based funds and not be forced to put their money abroad, according to the BdB.
Some commentators expressed concerns over a perceived threat to consumer protection arising from the new law.
Niels Nauhauser, financial expert at the consumer center in Baden-Wuerttemberg, told the Handselblatt: “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. “