Cryptocurrencies might get the same treatment as fiat money in Germany. A newly introduced bill hints at authorities looking to allow German banks to sell cryptocurrencies and provide custody solutions.
According to local news agency Handelsblatt the new bill was proposed for voting in the Bundestag, the German parliament and has seen positive reception. Now, it requires consensus across the country’s 16 federal states to be successfully implemented.
As it stands, banks and financial institutions are restricted from allowing transactions related to cryptocurrencies for clients. The proposed legislation, if approved, will make a monumental difference for cryptocurrency availability in the country.
If the states agree upon the legislation, German citizens will be able to buy and hold Bitcoin, Ethereum, along other cryptocurrencies directly with their banks. The whole spectrum of banking services might be available for cryptocurrencies as well.
Banks have been eager to get into the cryptocurrency industry as the interest for digital currencies seems to be mounting both from consumers as well as governments and corporations. The bill is set to be implemented in 2020, as Handelsblatt outlines:
“Starting in 2020, financial institutions will be able to offer their customers online banking, virtually at the touch of a button, along with classic securities such as stocks and bonds, as well as cryptocurrencies.”
The new legislation has seen wide support and enthusiasm from the domestic industry. The Association of German Banks — a major lobbying group representing over 200 financial institutions — is a huge advocate of the bill, arguing that established financial institutions have the experience and risk mechanisms in place to safeguard client assets.
In October, the Association released a paper arguing that the European economy may benefit from a programmable digital euro.
At the same time, there have been mixed signals towards cryptocurrencies from various governments. The Bundestag has recently shared an opinion that cryptocurrencies such as Bitcoin are not real money, citing their volatility and allegedly limited use for payments. Concurrently, nation states have been quick to dampen the development of Facebook’s stablecoin, fearing a potential disruption of the existing monetary system.
The European Central Bank has also been stringent on digital currencies, stating that global stablecoin payments raise potential risks across a broad range of policy domains, which is the primary objective of a central bank.