Germany has established a new law that makes cryptocurrency available to over 4,000 organisations.
The move might start a big crypto adoption push in one of the world’s most affluent and crypto-friendly countries.
The adoption of cryptocurrencies by institutions has taken a significant turn in the year 2021. Institutions are beginning to embrace cryptocurrency after years of dismissing it as a passing fad. Governments have taken an interest in them as well, and are working to set clear regulatory norms. The German government has passed a new law allowing tens of thousands of organizations to invest in cryptocurrency.
With the new rule, which takes effect on July 1, over 4,000 institutional investment funds and wealth managers will be able to invest up to 20% of their assets in cryptocurrencies. The crypto community has reacted positively to the legislation. Germany is one of the wealthiest countries in the world, and with institutions approved to invest in crypto, it might be the catalyst for one of the largest crypto adoption campaigns. Institutions are recognized as major players in the market because of their large purchases and capacity to withstand the market’s volatility. Furthermore, Germany might become a financial investment powerhouse as a result of this.
German senator Frank Schaffler praised the action in an interview, saying, “The inclusion of crypto assets in Spezialfonds is a crucial step toward their acceptability.” The law is moving in the right way here, and we applaud it.
Coinbase received a crypto custody license from the German financial authority, the Financial Supervisory Authority (BaFin), last week. Coinbase is the first company to acquire the license, according to a news release from BaFin. In late November, Germany enacted a law mandating crypto businesses to apply for a crypto custody license, with Coinbase filing in late spring 2020. BaFin has verified that applications are in the “advanced stages,” with approval expected in the next months.
According to Coinbase’s CEO, every token will be listed. Binance is prohibited in the United Kingdom.
Germany is the most powerful country in Europe.
In recent months, the United Kingdom has likewise taken a more hands-on approach to cryptocurrencies across the border. The Financial Conduct Authority (FCA), which is responsible for overseeing crypto firms, has been cracking down on the industry in recent weeks, including banning one of the main crypto exchanges, Binance. Binance has been barred from engaging in any regulated activity in the United Kingdom, according to the FCA. In recent weeks, roughly 64 crypto businesses have withdrew their registrations with the agency, according to the agency. According to the FCA report, 64 crypto companies have withdrew their applications.
With the United Kingdom taking a hard line and other European countries doing little in terms of regulation, Germany appears to be on track to become the continent’s financial investment powerhouse.
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