Banks Awaiting Approval to Sell and Hold Cryptocurrency Next Year
- Banks in Germany should be able to directly sell and hold cryptocurrency by January 1st , 2020.
- Industry experts weighed in on this matter with their differing views, including Neils Nauhauser and Sven Hildebrandt.
One of the biggest issues that have faced the cryptocurrency industry has been the need for countries to amend their laws to allow the use of these assets. Now, based on new reports from The Block, banks in Germany are in the process of passing a law that would allow them to hold and sell cryptocurrency assets.
Though the amendment was passed through the German parliament last week, it will not go into effect until January 1st, changing the fourth EU Money Laundering Directive. The report states that the original version limited custody to third-party platforms, rather than the banks themselves. In the final version, the institutions have the ability to get a license that allows them to take on this role, and the deadline for the application for this crypto license has been pushed out further.
A partner with Distributed Ledger Consulting in Hamburg, Sven Hildebrandt, believes that this step in the country is another move towards Germany establishing itself as “a crypto heaven,” according to The Block. Hildebrandt added, “The German legislator is playing a pioneering role in the regulation of crypto storage,” while speaking with Handelsblatt.
Consumer protection has been a concern of some industry experts in Germany, as these laws change to accommodate cryptocurrency at local banks. Niels Nauhauser, for example, believes that consumers won’t be adequately educated on the potential risks in the cryptocurrency industry, and will overconfidently invest through their banks, costing them money.
Speaking with Handelsblatt, Nauhauser pointed out that “special bonds” have been the only way for banks to distribute. With these bonds, banks were required to provide their consumers with details about the costs and other data that allows consumers to know what they are doing with their funds. However, he added, “This is not the case in direct sales of bitcoin and co.”