EU’s New Bill to Allow Germans to Invest in Bitcoin & Cryptos Directly with Domestic Funds
- The fourth Money Laundering Directive will allow banks to provide crypto services without third-party custodians
- “Germany is well on its way to becoming a crypto-heaven” – crypto community excited
- Critics warn banks are hot on profits from crypto transactions, consumer protection must not be undermined
The European Union has proposed a new bill, the fourth Money Laundering Directive that will allow banks to buy, hold, and sell Bitcoin, reported local news site.
So far, the EU has kept a negative attitude towards cryptocurrencies. But the revision of the Fourth Money Laundering Directive could provide relief to that. The bill has already passed the federal parliament German Bundestag that came up with a separate law to implement the move and now awaits the consensus of 16 states.
In this new draft, the requirement for separation has been deleted. As per this requirement, retention of BTC and other digital assets must not originate from the same legal entity as other banking transactions. As such, they resort to external service providers.
But this new version will go beyond money laundering as it proposes to allow regulated banking institutions to directly provide crypto services to their clients without relying on third-party custodians, as currently required.
Though the bill requires further development, it is expected to come into effect next year.
“Germany well on its way to becoming a crypto-heaven”
Crypto community is excited about this development, with Sven Hildebrandt, the head of consulting company DLC stating,
“Germany is well on its way to becoming a crypto-heaven. The German legislator is playing a pioneering role in the regulation of cryptocurrency.”
The Association of German Banks (BdB) is also welcoming the new regulation that will prevent crypto-related money laundering but will also allow German investors to enter into cryptocurrencies through domestic funds.
It says banks have the experience of safekeeping clients’ assets and are committed to investor protection while being controlled by the regulators.
“Banks hot on Profits from Crypto Transactions”
However, some like financial experts Niels Nauhause warns that banks can aggressively advertise the digital assets without educating people about their risks. He said,
“If they are allowed to sell cryptocurrencies and store them for a fee, there is a risk that they will sell their customers assets with a total risk of loss without them knowing what they are getting into.”
Another criticism of this change is economist Fabio de Masi who says this is a lucrative business opportunity banks have been waiting for.
“The banks are hot on profits from crypto transactions. But financial consumer protection must not be undermined.”