Bitcoin News

New law opens gates for institutional crypto investment in Germany

The German Bundesrat has approved a new piece of legislation – The Fund Location Act – which aims to regulate emerging asset classes for Germany’s finance industry, including crypto assets such as Bitcoin (BTC).

The new law was first proposed and approved in the Bundestag (the lower house in Germany’s parliament system) back in April, and with the recent approval in the Bundesrat the bill passed into law yesterday.

The specifics of the bill grant spezialfonds (special wealth management funds) the legal ability to allocate as much as 20% of their portfolio into crypto assets. 

The new law could facilitate a massive influx of German financial capital into the crypto industry, with some analysts speculating this latest move will open the door to $415B in potential investment in cryptocurrencies. 

Increased interest in cryptocurrencies in Germany and Europe has led to a flurry of regulatory activity this week, with the passage of this bill following Monday’s decision by BaFin (German financial watchdog) to licence the CoinBase exchange for operations in the country.

Deutsche Bank began institutional adoption of cryptocurrency assets this year, with their economists predicting a troubled future of inflation in the USD. The bank has suggested that Bitcoin is simply too important to ignore.

This comes amid large scale moves into cryptocurrencies – especially BTC – by institutional finance in a 2021 bull run that has seen billions in capital flood into the industry in an attempt to hedge Covid-19 inflation and the debasement of the USD. 

Furthermore, following the SEC’s move to avoid regulating cryptocurrencies this year, the passage of this legislation will bolster the ongoing wave of interest in cryptocurrency adoption and trading regulations in Europe. 

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As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice.

Sam Cooling

London-based crypto journalist Sam Cooling studied at the London School of Economics (LSE) before working as a Data Technology Consultant for the Fairtrade Foundation. Coin Rivet combines his passion for technology writing with his zeal for the Decentralised Finance revolution. Sam loves providing daily regulatory and alt coin coverage. Outside of the crypto world Sam loves boxing, and spends his time working with NGOs in Zambia.

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