German banks will begin to offer the sale and storage of cryptocurrencies under new legislation. The banks had been barred from offering direct access to crypto assets.
The new law, which was written in the fourth EU Money Laundering Directive, rewrites this starting in 2020. Reported by Handelsblatt on Wednesday, the German federal parliament, the Bundestag, passed the bill, which will likely be signed by the nation’s sixteen states.
Initially, banks could not custody cryptocurrency. “Germany is well on its way to becoming a crypto-heaven,” Sven Hildebrandt, head of the consulting firm DLC, told Handelsblatt. The German legislator is playing a pioneering role in the regulation of [crypto assets]. ”
German banking association BdB applauded the legislation. “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,” the association said in a statement. As such, banks could “effectively prevent money laundering and terrorist financing” with digital assets. Investors could then invest in crypto via institutions based in Germany as opposed to being forced to place their money abroad, the BdB noted.
The news, however, did not enthuse everyone in Germany. “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,” said Niels Nauhauser, financial expert at the consumer center in Baden-Wuerttemberg.