German Banks Embrace Cryptocurrency

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Germany Takes The Lead

While some countries continue to ban cryptocurrency, and others mock it, Germany has passed a law allowing banks to treat cryptocurrencies the same way they do stocks and bonds. Starting in 2020, they may market, sell, and hold digital money.

The new law relies on a 2015 money laundering directive made by the EU.

Fourth EU Money Laundering Directive

This rather lengthy directive was put into effect on May 20, 2015. It referred to the extremely negative effects of illicit money on the integrity, stability, and reputation of the financial sector of the European Union.

Money laundering and the financing of terrorism are frequently carried out in an international context. Large cash payments are highly vulnerable to such risks.

Digital money is increasingly substituted for fiat currency in bank accounts which justifies subjecting such assets to the same obligations as fiat money in regards to anti-money laundering and countering the financing of terrorism.

However, under strict conditions, member states of the EU should be permitted to exempt certain digital assets from certain customer due diligence measures. This excludes the monitoring of transactions or of business relationships.

The verbiage goes on, as most government directives do, but that’s the gist of this particular new law’s reliance.

The New German Bill

The bill has already been passed by the Bundestag, which is Germany’s federal parliament. It is expected to be signed off by the sixteen states of the nation.

The new bill would enable investors to further invest in cryptocurrency via German funds. They will not be forced to place their money in other countries.

Reactions

DLC consultant, Sven Hildebrandt, was thrilled. He said Germany is well on its way to becoming a crypto-heaven, pioneering a role in the regulation of crypto assets.

German banking association BdB was also excited about the new legislation. It said, “Credit institutions are experienced in the safekeeping of client assets and in risk management, are dedicated to investor protection, and have always been controlled by the financial supervision.”

Banks would be able to prevent money laundering and terrorist funding with cryptocurrencies.

Some reporters are concerned that a threat to consumer protections may arise due to the new law.

A finance expert at the consumer center in Baden-Wuerttemberg, Niels Nauhauser, said that if banks are allowed to sell cryptocurrencies and keep them for a fee, they risk turning those assets at risk of total loss to their clients, who would not know what was going on.

My Humble Opinion

It’s nice that Germany is ready and willing to deal with crypto. However, the more that any government takes control of something, the less freedom there is for people to use it as they wish.

This does not mean I support terrorism. It means cryptocurrency was made by people to have an unbound way to buy and sell based on personal evaluation thereof.

Before we know it, developers and miners will have no authority over the value of their currencies. It will be as much under government control as fiat money.

Your Opinion

What is your take on all this? Is Germany on the right track? Should other nations follow suit? How about all those naysayers who still want to call crypto a scam?

Leave your thoughts and questions in the comments below!

16 thoughts on “German Banks Embrace Cryptocurrency”

  1. This bothers me a lot. The whole point of Bitcoin for example was to put the power of money in the hands of the people and not the governments. Free and open trade, not going back to fiat control. Cryptocurrencies are here to stay so governments will always be trying to control them. How do you think we can keep crypto free from government control? I really don’t know.

    1. Thank you for your thoughtful comment, Sir. I agree that governments simply want to control any form of possible liquid asset. They say it’s for a good cause and maybe they mean it, but it’s ultimately about control and taxes, in my opinion.

  2. In all honesty, I know absolutely nothing about this subject!  Your post is very informative and helpful.  The one thing im still not sure about is the actual definition on crypto currency.  Is it like electronic money?

    And another thing I wonder is how can it help or hurt us id other countries are using it?

    1. Hello Annie! Cryptocurrency is, indeed, electronic money. It’s used all over the world except for where it’s banned. People are tired of the government’s strict control over national currencies, and now governments are moving to control what was supposed to be controlled by users. It just remains to be seen whether or not this turns out for good or bad.

  3. When it comes to crypto currency I draw a total blank LOL. But I get it. I think it’s all about change and I think that the German government has realized that this currency is not going anywhere, anytime soon, so they are embracing it. Personally I don’t think that it’s a bad idea to have some sort of regulation when it comes to any kind of currency, especially when it’s about to be used by so many more people. In the not too distant future, we may see more countries getting on board with crypto currency as well.  

    1. Thank you for stopping by, Vanessa. I can understand Germany’s concern about terrorism, but fiat banks really don’t have the background of dealing with something as volatile as crypto.

  4. I did not know this about Germany taking control on crypto currency I my self  hold and trade sevral types of crypto currency abs have had some success many people I know had lots of success with bitcoin when it was in its hay day not long ago I agree with you on the part of there not being much freedom after a government or entities take complete control on it wich in a way kind of defeats it’s whole purpose but thank you for the article I’m glad I seen this it was very helpful to me to see what’s happening in the crypto world right now – Jonathon

  5. I have a mixed opinion about this … I think it’s good and a big step forward, in terms of controlling money that could go into the wrong hands. On the other hand, if banks and government get more control over cryptocurrency, it means less freedom for small businesses, perhaps even for bloggers who make a side income with affiliate marketing. I’m not sure how to take this news. If other countries follow suit, what will that mean for bloggers, internet marketers, freelancers, etc? I’m also not sure how German banks plan to sell and hold cryptocurrency, it would be interesting to find out.

    1. I follow your thinking. Part of me is excited and part of me is dreading it. All we can do at this point is wait and watch. Thank you for your comment!

  6. Thank you for your post. I don’t know anything about cryptocurrency, but feel confused about its replacement over our current currency.

    I firmly believe that any currency should be linked to some kinds of hard valuable things. Of course, gold could be the golden standard, as every one in the world share the value of gold and people work hard to get gold. In a real world situation, we should take gold to exchange food, clothes, and all necessary stuff for our daily living.

    It is hard to image that people just sit in the front of computer and create some 010101… numbers as currency to exchange for food, clothes, and others. If this is true, who are going to generate the food, clothes, and the necessary stuff we need to survive as a society. In my opinion, the number 01010101… could not be in any way equal to gold and used to exchange for food or anything!?

    1. Hello Anthony. Crypto is not replacing any fiat currency. Euros are still the primary currency in all Europe, including Germany. Crypto is simply sharing status as a viable asset.

  7. Thank you for sharing the news about Germany opening its arms to cryptocurrency. This again proves that cryptocurrencies have come to stay and they’re definitely not a scam. Germany know what it’s doing, and doesn’t want to lose this opportunity putting their hands on it first.

    Concerning freedom, lets see how things evolve.

  8. I think it’s about time Cryptocurrency was taken seriously. Yes once regulated heavily I agree that the freedom of use that we have had the luxury of will be no more. But as Crypto is used more and more in the online market and gains traction and trust amongst the wider community, the level of security and stability the governments can provide will be worth it.

    1. Hello Dane! There are some pretty mixed opinions about this. I agree that crypto needs to be taken seriously. I just know that once governments control something, the rules increase to the point that it’s difficult to understand them all, plus you’ve now got the government saying that it is doing more and therefore needs more money. We’ll just have to wait and see.

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