German banks allowed to store and sell cryptocurrencies
02 Dec 2019
Banks in Germany will be able to manage cryptocurrencies after the fourth EU money laundering directive goes into effect next year.
Directive 2015/849 is a revised regulatory stance that was issued by the European Parliament and now enacted by German politicians.
The legislation underscores that “electronic money products is increasingly considered to be a substitute for bank accounts.”
Handelsblatt journalist Felix Holtermann says that the new directive’s “deletion of the so-called separation bid” makes it so German banks can handle cryptocurrencies without needing to use a third-party custodian.
Previous to scrapping this section of the framework, the directive would have insisted that banks use “external custodians or special subsidiaries” to store the likes of Bitcoin and Ethereum.
The directive will not only put Germany, the world’s fourth biggest economy, at the forefront of regulation in cryptocurrencies, but is a landmark in the wider adoption of digital currencies.
“Germany leads the way in crypto regulation, for sure. This leads to institutional investors coming to Germany, as they want security and regulation,” Sven Hildebrandt, partner at German crypto consultancy DLC, told Decrypt. "Germany is well on its way to becoming a crypto-heaven.”
Bitcoin’s famous December 2017 bull run, which saw the Bitcoin price surge from under $1,000 per Bitcoin at the beginning of the year to almost $20,000 in under 12 months, was, says Forbes, “largely due to expectations the traditional financial industry was about to wade into crypto. When banks and financial institutions failed to buy into Bitcoin as much as some had hoped the price fell sharply throughout 2018.”
This new approach could therefore be decisive in turning this around.