Mark Weaden
Germany’s New Cryptocurrency Law Opens Up Investments of $415 Billion in Bitcoin Investments
A new law in Germany could further legitimize the rapidly evolving digital asset class and could even make the European nation the hub of further crypto investments on the continent. The law, which comes under the Germany’s Fund Location Act, permits funds (“Spezialfonds”) to invest up to 20% of their portfolio into cryptocurrencies.
With the crypto still in a bear market, investors are looking for a boost. The situation in Germany is very encouraging for investors and they can expect a movement in market price in the coming weeks.
The passing of the new law implies that investment funds can now invest up to 20% of their $2 trillion assets in cryptocurrency, which in most cases focuses on Bitcoin. This isn’t the first move to introduce crypto assets into investment portfolios, as it was JPMorgan Chase that first proposed the idea this year.
The Germany Parliament, the Bundestag, proposed this law earlier this year, but the bill has only just passed through congress and written into law. In essence, the law would allow Germany’s financial capital to move into cryptocurrency assets. It’s a bold move, as we’ve seen the recent European breakaway country the UK enforcing a ban on major crypto exchange platform Binance.
Germany’s curiosity in cryptocurrency has led to a licencing agreement with CoinBase exchange for all crypto operations in the country.
Bitcoin has already made its mark in Germany
Deutsche Bank had already recognised the importance of Bitcoin, announcing that it will offer custody and brokerage services for Bitcoin to institutional clients. As such, the transition into cryptocurrency in Germany isn’t an entirely new thing.
So far this year, we’ve seen a huge bull run in the cryptomarket, with the vast majority of coins reaching all-time-highs. As a result, many major financial organizations across the globe have invested into Bitcoin, which has been fuelled by the instability of the USD during the COVID-19 pandemic.
The momentum Bitcoin has picked up in recent months cannot be ignored. With a plethora of fintech industries underpinned with blockchain technology, no matter what happens with market price the value of these coins in society is overwhelming. Germany has been a progressive pioneer in Europe for over a decade now and with this new law, they’re once again leading the way on the continent.
