Next year German banks will be able to manage Cryptocurrencies like Bitcoin after the fourth EU money laundering directive goes into effect. The directive passed in the German parliament, Bundestag, permits banks in the country to act as Cryptocurrency custodians instead of relying on third-party custodial services.
German Banks will soon Be ready to Manage Cryptocurrencies
According to the regional monetary news publication Handelsblatt, in 2020 banking institutions from Germany will be able to manage Cryptocurrencies for cunsumers. Under new enacted legislation, banks in Germany will be able to receive, store, and sell digital assets like Bitcoin cash (BCH) and Ethereum (ETH). Directive 2015/849 is an amended restrictive approach that was issued by the European Parliament and German politicians. The fourth EU money laundering directive highlights the fact that “electronic money product is gradually considered to be a substitute for bank accounts.” Handelsblatt reporter Felix Holtermann reveals that the new directive’s “deletion of the so-called separation bid” makes it, therefore, German banks will handle Cryptocurrencies with no need to use a third-party custodian. Before erasing this part of the guidelines, the directive would have required banks to use “external custodians or special subsidiaries” to store the Cryptocurrencies.
In 2020, German banks will be able to provide Cryptocurrency solutions alongside bonds, equities, and traditional stocks. The banks will need to procure a license to provide digital asset custodial services, however, the directive extends application deadlines. The consulting company DLC’s executive Sven Hildebrandt believes the initiative puts Germany ahead of the game. “Germany is well on its way to becoming a crypto-paradise,” Hildebrandt remarked. “The German politician is playing a pioneering role in the regulation of Cryptocurrencies.” The co-founder of the crypto data aggregator web site Coingecko, Bobby Ong, says that banks providing these varieties of services open monetary institutions to plenty of opportunities. Ong explained on Friday:
Just like how banks sell gold, stocks, unit trusts, and insurance directly to retail customers now, I see no reason why banks won’t provide cryptocurrencies for sale now. What’s taking these bankers so long? It’s a major gold mine waiting to be tapped.
While Some Welcome the New guidelines, others are a lot of crucial of the Fourth EU Directive
Local reports underline that the German financial association Bundesverband Deutscher Banken (BdB) “respected the new guideline.” “Credit institutions are experienced in the protection of consumer assets and risk management, are committed to investor protection and have always been controlled by the monetary supervising,” the banking association said. BdB added that the new directive makes it possible for investors to invest in digital assets domestically rather than looking out elsewhere for foreign funds. The CEO of Binance Changpeng Zhao (CZ) emphasised after the German bank crypto announcement that “smart banks do this” and “Bitcoin [is] still not dead.” Other critics don’t find the fourth EU money laundering directive, therefore, inviting and friendly. “With the new AML law, it affects the complete EU — combine this with negative interest rates for billions of euros that are sitting in their bank accounts — Next year everybody in the EU will get a bill for holding fiat in their bank accounts,” a sceptic wrote.
Another detractor against German banks holding digital assets is Baden-Wuerttemberg executive Niels Nauhauser. The financial analyst told the Handelsblatt that the new directives will add additional strain to client protection advocates. “If [German banks] are allowed to sell cryptocurrencies and keep them for a fee, they run the chance of turning their assets at risk of a total loss to their customers, without them knowing what they’re getting into.” Nauhauser also stressed that banks already have to inform customers regarding the prices and risks related to investment vehicles like bonds and equities. The Baden-Wuerttemberg analyst underlined that direct sales of digital assets will need similar attention.